Are you interested in hiring remote talent from Italy? You’re certainly not alone. Italy has become a top outsourcing destination in recent years and for good reason. However, it’s risky to hire employees in Italy without the proper legal process in place.
An Employer of Record (EOR) offers a simple and straightforward way to hire and pay global talent legally. It provides everything you need to compliantly hire and pay employees.
This guide will explore Italy’s talent pool and how to tap into it effectively. It will also provide valuable insight into an Employer of Record services, so read on to learn more.
Why Hire Talent in Italy?
Italy is in the midst of a tech boom and, as a result, has a growing pool of tech talent. Innovation is at the forefront, and tech professionals are gaining valuable experience working at cutting-edge startups. So, consider hiring from Italy if you’re looking for skilled tech talent with a fresh perspective.
Many Italians are fluent in multiple languages, particularly English. This can be valuable for companies that operate in international markets, as Italian workers may be able to communicate effectively with colleagues and clients from around the world.
With a high literacy rate and a focus on technical and vocational education, Italy has a well-educated labor force. Its stable economy and low unemployment rate mean that Italian talent is given the opportunities it needs to learn and grow. Overall, Italy boasts a multifaceted and skilled talent pool with a ton of potential.
How Can I Legally Hire an Employee in Italy?
If you want to hire talent in Italy on your own, things can get complicated. To hire in Italy, businesses must establish a local entity. The process can be a headache and is only worthwhile if you intend to establish a long-term business in the nation.
EORs offer an easy, straightforward way to hire employees from Italy. An EOR, like Borderless, serves as a middle person and facilitates the processes involved in global hiring.
EORs already have an entity in place that’s capable of compliantly hiring and paying talent.
What Does an EOR Do?
EORs ensure you maintain strict compliance with local laws and regulations anywhere in the world. They remove the legal roadblocks involved in hiring globally so that you can focus on growing your business.
Hiring laws vary considerably around the world, and it’s critical to comply with them to avoid legal implications. EORs take care of the following processes and ensure they’re fully compliant:
- Work visas and permits
- Employment contracts
- Onboarding
- Tax documentation and filing
- Payroll processing
- Employee benefits
- Intellectual property protection
- Termination
EORs handle all of the tedious administrative tasks associated with these processes. They generate compliant employment contracts, collect tax documentation, file it per local laws, etc.
Employee Insurance and Benefits
It’s always important to stay competitive, especially in a tight labor market. An EOR will help you stand out from the crowd with a comprehensive benefits package, including generous health and wellness benefits, time off, financial security, and much more. It will ensure you provide your team members with what they’re legally entitled to and help you attract top talent with attractive offerings.
It’s also important to note what employees expect, even if not legally mandated. For example, Italy’s 13th-month salary, known as tredicesima mensilità, is customarily paid in December. Some industries also receive a 14th-month salary, generally paid in July. Both bonuses are up to the discretion of the employer. An EOR, like Borderless, will help you provide your Italian team members with a bonus that works for you.
Vacations and Public Holidays
Employees in Italy are entitled to 26 days of paid leave each year. There’s no limit on how many days they can carry over from one year to the next, but they must be used by the end of June of the following year. Each 18-month span must include at least two consecutive weeks. Workers also have the right to "suppressed holidays," which are 32 hours of leave each year in place of bank holidays. After three years of employment, employees receive a "reduction in working hours" of 28 hours annually. This number increases to 56 hours after five years of employment.
Italian employees are entitled to take the following public holidays off, with paid leave. It’s important to note that certain regions in Italy observe their own holidays, and employees from those regions may also expect those days off.
- January 1: New Year’s Day
- January 6: Le Befana
- April 9: Easter
- April 10: Easter Monday
- April 25: Italy Liberation Day
- May 1: Labour Day
- June 1: Anniversary of the Founding of the Italian Republic
- August 15: Assumption (Ferragosto)
- November 1: All Saints’ Day
- December 8: Feast of the Immaculate Conception
- December 25: Christmas Day
- December 26: St. Stephen’s Day (Boxing Day)
Taxes & Social Security Contributions
Italy’s regulations surrounding income tax and social security are challenging to navigate. It differs considerably from neighbouring European nations and requires in-depth knowledge to administer compliant payroll in Italy.
Employee income taxes in Italy are typically calculated on a graduated system, with rates ranging from 23% to 43% based on annual income. The specifics surrounding social security contributions depend on the employment relationship. Generally, the overall social security rate is around 40% of an employee's gross pay (the rate varies depending on the work activity undertaken by the company, the number of employees, and the employee's position).
Working with an EOR will ensure you withhold and file taxes accurately and compliantly. It will also cut back on busy work and save you time.
What Are the Advantages of Going Through an EOR in Italy?
Working with an EOR comes with a range of benefits.
- Saves time and money.
- Minimizes risks and avoids penalties related to non-compliance.
- Cuts back on busy work.
- Helps you attract and retain top talent.
- Expands your talent pool.
- Keeps data safe and secure.
- Keeps you up to date on hiring trends.
These are just some of the ways an EOR can positively impact your business. Sign up with Borderless to explore what an EOR can do for you.
How Do I Choose the Right EOR for Me?
With so many EORs to choose from, it’s essential to determine which one suits your individual needs. It’s helpful to keep the following considerations in mind.
- Expertise: Choose an EOR with a history of hiring, onboarding, and managing employees in the countries you want to hire from. Checking this box will help ensure your EOR of choice maintains compliance every step of the way.
- User experience: It’s essential to provide your team with an easy-to-use, intuitive EOR platform packed with self-service options. The goal is to integrate it into your team's existing workflow stress-free.
- Support: Turn to EORs with a solid team of experts with a proven track record. Ensure that they’ll be there to lend you support when you need it.
- Security: Keeping your data safe and secure is paramount. This is especially true when working with a globally distributed team, leaving you more vulnerable to cyberattacks. So, choose an EOR that has a robust set of data security standards and protocols.
Borderless: The Employer of Record your Company Needs
Broaden your horizons by hiring global talent. Use Borderless as your global employer of record to expand your talent base and get the most out of your hiring experience. Get in touch and book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
