PEO in Italy

Hire Globally, Pay Locally, Expand Effortlessly

Our PEO in Italy can help your company set up operations, hire employees, and start working, all while avoiding associated red tape and extra costs. Through our premium Human Resources services, you can achieve your expansion goals efficiently and effortlessly. 

A PEO (Professional Employer Organization), often spoken about similarly to an EOR (Employer of Record), works with other businesses as a local partner to outsource their HR services in a foreign country. Through these services, a company can avoid the complications of establishing its own entity in a foreign market.  

PEOs can legally employ staff for other companies and manage necessary employee services on their behalf. These HR outsourcing services can include complex operations such as payroll, saving your business time and money. 

PEO in Italy - Summary

Advantages Of Using A Professional Employer Organization

Increased Legal Compliance

A PEOs local knowledge of administrative and legal processes safeguards your compliance against every potentially problematic aspect of local law.  

Reduced Cost and Time

Simple complications related to HR lead many companies to incur high fees and fines when entering a new market. PEOs provide companies with the guidance of local experts to avoid these errors. 

Focus on Company Growth

By providing payroll outsourcing in Italy, recruitment, and contractor management services, a PEO takes care of the HR processes required for entry into this new market while your employees concentrate on growth  

Speedy Market Entry

Time for Company Incorporation in Italy: 4-12 months  

Time to establish a PEO relationship in Italy: 5 days  

*Estimate  

One Platform

A PEO covers all the essential aspects of HR services and streamlines this information into one point of contact, limiting the amount of interfering data or communication overlap.  

Infographic | INS Global

The Competitive Advantages of a PEO Over Company Incorporation 

The Competitive Advantages of a PEO Over Company Incorporation 

A PEO:
  • Saves time  
  • Saves money 
  • Avoids potential bureaucratic or legal pitfalls 
  • Utilizes local networks and expertise  
Infographic | INS Global
testimonial from Manuel Ramos

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting in a market like China. Understanding the market doesn’t mean you need to set up a company immediately. 

5/5

How Do PEOs in Italy Help You?

INS Globals consultants can begin your PEO agreement in Italy with these  simple steps:  

  1. We discuss your company’s needs with you and formulate an action plan that best serves your specific situation  
  2. Our organization provides you with a legal entity to bring in your staff and begin operations in Italy.  
  3. We handle and manage the administrative and legal requirements of hiring and paying your staff  
  4. Your team continue performing daily operations and work towards your success in the Italian market while we handle the HR  

Understanding the Difference Between EOR and PEO

When you decide to expand into the Italian market and begin an EOR/PEO agreement, its necessary to understand the difference between these two solutions to make a choice that better suits your professional needs

A PEO acts as a company providing HR services to employees of other companies.  

  • These services include payroll, tax, and legal regulation compliance, among many professional services.  
  • An EOR provides a service similar to a PEO but which also legally and officially hires employees on behalf of their clients
  • In addition to the services provided through the use of a PEO, an EOR is responsible for all liabilities related to these services.
  • Under a PEO agreement, the contract will remain between the original company and the employee. 
  • Under an EOR agreement, the contract is directed by the client but made between the EOR and the employee. 

INS Global can provide both PEO and EOR services in Italy according to your needs. Read this article or contact our team of specialists today to learn more about PEOs and EORs and determine which may be best for your company. 

Labor Law in Italy

Employment Contracts in Italy

According to European Union Directive No. 533/91 implemented in Italy, information on the main terms and conditions of a contract should be made in writing and provided to the employee within 30 days of being hired.   

An employment contract in Italy will typically have an unlimited duration period.

Working Hours and Overtime

The maximum number of hours in a standard workweek must not exceed 40 hours per week. Anything beyond this is considered overtime. 

On top of this, typically, overtime must not exceed 8 hours per week. However, this may be subject to collective agreements depending on the sector. 

While legally, overtime must be paid at a minimum of 110% standard rate, in practice, this is more likely to be 130% for overtime hours worked. 

Holidays and Sick Leave

Employees in Italy are eligible for four weeks of paid annual leave. 

There are 11 days of public holidays in Italy (with one extra day of holiday in each region of Italy). Employees must be given an additional day of paid leave per day of public holiday.  

Employees are eligible for up to 180 days of sick leave in Italy, and the employer pays for the first 3 days of leave. Following that, employees receive a sick leave benefit generally equivalent to 50-66% of standard pay. 

Maternity/Paternity Leave in Italy

Maternity leave can be taken for 8 weeks before the birth of a child and 12 weeks afterward. This is paid for at 80% standard salary through social security.  

Collective agreements in many sectors require that employers make up the additional 20% of an employee’s salary on maternity leave. 

Paid paternity leave in Italy is 10 days within the first 5 months after the birth of a child. This is paid for through social security. 

Tax Law and Social Security in Italy

The Italian tax system is mostly codified through a general tax law (called Testo Unico Per le Imposte sui Redditi, or IRES, in Italian) that is updated every year through an annual Finance Act.  

Generally: 

  • Resident Italian corporations and individuals are subject to Italian tax on worldwide income 
  • Non-resident corporations and individuals are subject to tax on Italian-source income 
  • Progressive rates apply for individuals 

Taxes in Italy are divided into two types, direct and other. Direct taxes are levied on income tax for corporations and individuals. Other taxes include those taxes on goods, services, and imports..  

Individual income tax is paid at a national level between 23-45%.  

income taxes

Income is also taxed at a regional level between 1.23-3.33%. 

The standard rates for Corporate Income Tax in Italy are 24% for IRES and 3.9% for IRAP 

Employers should expect to pay around 40% of an employee’s salary towards pension and social security contributions (employees will pay around 10%). 

CONTACT US TODAY

FAQs

No, it is necessary to use a local entity abroad to comply with each country labor law.

Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.

The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.

Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.

In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.