Hiring in Italy means working within two overlapping frameworks: statutory law and sector-level collective bargaining agreements, known as contratti collettivi nazionali di lavoro (CCNLs). The CCNL that applies to your employees will often set higher standards than the statutory floor and add benefits entirely absent from the law. Understanding both layers is essential before you make your first hire.
How benefits work in italy
Identifying the correct CCNL is one of the first steps in any compliant Italian hire. It governs pay floors, leave entitlements, sick pay top-ups, and supplementary fund contributions. There’s no statutory minimum wage in Italy; the CCNL sets the minimum pay for a given role and seniority level.
Annual leave
Employees in Italy are entitled to a minimum of 4 weeks of paid annual leave per year. The rules around when leave must be taken are specific: at least 2 weeks must be used in the calendar year in which they’re earned. The remaining 2 weeks can be carried over, but they must be used within 18 months of the end of the year in which they accrued.
Employers can’t substitute untaken leave with a cash payment during the employment relationship; the only exception is on termination.
Public holidays
Employees are entitled to 13 paid public holidays per year. These include national holidays observed across Italy and the local patron saint day for the municipality where the employee works. The patron saint holiday varies by location, so your employees in Milan, Rome, and Naples won’t share the same calendar.
Sick leave
Italy’s sick leave structure is funded jointly by the employer and INPS (the national social security institute), with the employer’s share shifting depending on the length of the absence. The starting point is the statutory framework, but the precise rules will often be modified by the applicable CCNL, so always treat the CCNL as the governing document for your employees.
How the payment structure works
Under the statutory baseline:
- Days 1 to 3: 100% of salary, paid entirely by the employer
- Day 4: 66% of salary, paid by the employer
- Day 5 onwards (up to day 21): costs are split roughly 50/50 between the employer and INPS
- Day 22 onwards: INPS covers 66% and the employer covers 34%
INPS pays its portion directly to the employee; the employer pays its share through payroll. CCNL provisions regularly top up statutory sick pay, so check your applicable collective agreement before finalising your payroll approach.
Maternity and paternity leave
Italy provides substantial protections for new parents, with both maternity and paternity leave funded primarily through INPS.
Maternity leave
Employed mothers are entitled to 5 consecutive months of mandatory maternity leave (congedo di maternità). The standard pattern is 2 months before the expected birth date and 3 months after, though this can be adjusted with medical approval. During the leave period, INPS pays 80% of the employee’s salary. The employer fronts the payment through payroll and then recovers the cost from INPS.
Paternity leave
Fathers are entitled to 10 mandatory working days of paternity leave (congedo di paternità obbligatorio), paid by INPS at 100% of salary. The leave can be taken from 2 months before the expected birth date up to 5 months after the birth, and it doesn’t need to be taken all at once. Fathers can split the days as needed within that window.
Parental leave
Beyond the initial maternity and paternity leave periods, both parents can take additional time off under Italy’s parental leave framework (congedo parentale).
Each parent is entitled to up to 6 months of parental leave, with a combined maximum of 10 months across both parents. If the father takes at least 3 months, the combined total increases to 11 months.
The pay structure is as follows:
- The first 3 months for each parent are paid at 80% of salary by INPS
- Additional months are paid at 30% of salary
- The 80% and 30% rates are available until the child turns 6
- Leave can still be taken after the child turns 6 and up to age 14, but at lower or unpaid rates depending on the circumstances
From 1 January 2026, Italy also provides paid sick child leave: up to 10 days per child per year for children aged 3 to 14, shareable between both parents. This is a new entitlement to factor into your absence planning.
The 13th and 14th month
Italy requires a 13th monthly salary payment, the tredicesima, paid in December. This is mandatory for all employees regardless of sector.
Most CCNLs also require a 14th payment, the quattordicesima, paid in June. It’s not a universal statutory requirement in the same way, but it applies across most collective agreements and should be treated as a standard cost for the majority of Italian hires.
Both payments are pro-rated for employees who didn’t work the full accrual period and are in addition to regular monthly salary, not folded into an annualised figure.
Tfr as an employee benefit
Italy’s trattamento di fine rapporto (TFR) is a statutory severance fund that accumulates throughout the employment relationship. Employers accrue approximately 7.4% of gross annual salary into the TFR each year. The fund is paid out to the employee on termination, regardless of the reason for ending the contract.
For employees, TFR functions as more than just an exit payment. Italian law allows employees to access part of their accrued TFR during employment for specific purposes, including purchasing a primary residence or covering costs related to a serious illness. Employees can also direct TFR contributions into a supplementary pension fund.
For employers, TFR is a real ongoing cost that needs to be factored into your total employment budget from day one. It’s a statutory accrual that will be paid out on exit, not a discretionary item.
Supplementary funds for executives
Italy also has sector-specific supplementary health and pension funds, particularly relevant if you’re hiring executives or managers. In the commercial sector, Fondo Mario Negri (pension) and FASDAC (health) are the main funds. In the industrial sector, PREVINDAI (pension) and FASI (health) cover equivalent roles. Contributions to these funds are governed by the applicable CCNL and represent an additional employer cost for senior hires.
How an EOR manages benefits in italy
If you’re hiring in Italy without a local entity, working with an Employer of Record (EOR) is often the most practical route. An EOR becomes the legal employer of your Italian staff and takes on responsibility for identifying the correct CCNL, running compliant payroll, administering INPS submissions, accruing TFR correctly, and managing leave across the full statutory and collective agreement framework.
Getting the CCNL classification wrong can mean underpaying employees, applying the wrong sick leave rules, or missing supplementary fund contributions. When you’re evaluating EOR services, it’s worth asking specifically how the provider handles CCNL identification, TFR accrual, and parental leave administration with INPS.
If you’re ready to hire in Italy without setting up a local entity, RemotePass can handle the compliance layer so you can focus on building your team.
