What an employee costs in Italy
Italian offers quote the gross annual salary (RAL). The cost to the employer is higher: social contributions, the 13th month, sometimes a 14th, and the TFR severance fund. Here is how the total is built; the calculator gives exact figures.
How this compares with home: Italy vs the US, Italy vs the UK.
What is in the cost
Gross salary (RAL)
Paid in 13 monthly instalments, 14 under some CCNL such as commerce. The collective agreement sets the minimum for each level.
Employer contributions
INPS social security and INAIL accident insurance, usually around 30% of gross.
TFR
Severance accrued every year at about 6.91% of gross and paid when employment ends, for any reason.
Benefits
Meal vouchers, supplementary health funds required by many CCNL, optional company welfare.
Rule of thumb
For a first estimate, total employer cost is the gross salary plus roughly 35 to 40%. The exact figure depends on the CCNL, the region, the employee's age and any hiring incentives. With an Employer of Record you add a fixed fee: ours is €250 per employee per month, with no setup fee.
Compared with opening an entity
Salary and contributions are the same either way. What changes is the fixed cost: an Italian company needs incorporation, an accountant, a payroll provider, a registered office and annual filings. For one to five people an EOR is usually cheaper. See EOR or entity.