You are scaling your workforce in Italy. Your accounting should scale with it.

A CCNL (Contratto Collettivo Nazionale di Lavoro) is a national collective bargaining agreement that sets minimum employment terms for a given sector in Italy. It covers minimum pay scales, working hours, overtime rules, leave entitlements, probation periods, and termination procedures. Employers are required to apply the CCNL that corresponds to their sector of activity. Using the wrong CCNL, or failing to comply with its terms, can expose the company to labour inspections, back-pay claims, and penalties. Your accountant and payroll provider ensure the correct CCNL is applied and that all payroll calculations comply with its terms.

The total cost of employment in Italy is significantly higher than the gross salary alone. On top of the gross pay, the employer bears contributions to INPS (social security), INAIL (workplace accident insurance), TFR (severance) accruals, and other sector-specific funds mandated by the applicable CCNL. As a general guideline, total employer costs can range from roughly 30% to 45% above the gross salary, depending on the sector, contract type, and CCNL. Use our free Italy payroll cost calculator for an estimate based on your specific situation.

TFR (Trattamento di Fine Rapporto) is a mandatory severance provision under Italian law. The employer accrues a portion of each employee's gross salary each year (approximately one month's pay per year of service). When the employment relationship ends, for any reason, the accumulated TFR is paid to the employee. Employees may also choose to have their TFR directed to a supplementary pension fund. TFR accruals are a significant component of the total cost of employment and must be calculated and set aside correctly each month.

An EOR (Employer of Record) is a third-party company that legally employs your workers on your behalf in Italy. You direct the work; the EOR handles contracts, payroll, and compliance. EOR fees are typically charged per employee per month and can scale significantly with headcount. A local accountancy partner (such as TMG) works with your own Italian legal entity: you are the employer, and the accountant processes payroll, handles tax filings, and manages compliance. This approach gives you direct control over employment relationships and is generally more cost-effective at scale, especially beyond 10 to 20 employees.

A cedolino is the Italian payslip (busta paga) that every employee must receive with each pay period. It details the gross salary, deductions (IRPEF, INPS employee contributions, regional and municipal taxes), and the net amount paid. Italian law requires the cedolino to include specific information prescribed by labour regulations. Your payroll provider generates compliant cedolini for every employee each month.

In most cases, yes. To directly employ workers in Italy, you generally need an Italian legal entity (such as an SRL or a branch of a foreign company registered with the Camera di Commercio). Without a local entity, you would need to use an EOR arrangement. The choice depends on the number of employees, the duration of your Italian operations, and your long-term plans. Your accountant can advise on the most appropriate structure and coordinate the entity setup if needed.

INAIL (Istituto Nazionale per l'Assicurazione contro gli Infortuni sul Lavoro) provides mandatory workplace accident and occupational disease insurance in Italy. All employers with employees are required to register with INAIL and pay premiums based on the risk classification of their industry and the specific roles of their workers. The construction and electrical contracting sectors typically carry higher INAIL rates due to the nature of the work. Your accountant handles INAIL registration, premium calculations, and ongoing filings.