# EOR, Entity or Contractors in Italy

> Three ways to pay people in Italy: an Employer of Record, your own Italian entity, or independent contractors. When each makes sense and what it involves.


<section> <span class="eyebrow"><a href="payroll-guide.html">Payroll guide</a></span> <h1 id="employer-of-record-your-own-entity-or-contractors">Employer of Record, your own entity, or contractors?</h1> <p class="lede">Three ways to have people working for you in Italy. The right one depends on how many people, for how long, and how much control you need.</p> </section> <section> <div class="tbl"><table> <thead><tr><th></th><th>Employer of Record</th><th>Your own Italian entity</th><th>Contractors</th></tr></thead> <tbody> <tr><td><b>Best for</b></td><td>First hires, testing the market, small distributed teams</td><td>Stable teams, local sales, long-term presence</td><td>Short, well-defined projects</td></tr> <tr><td><b>Time to start</b></td><td>Days</td><td>Months: incorporation, bank, registrations</td><td>Days</td></tr> <tr><td><b>Who is the employer</b></td><td>We are</td><td>Your Italian company</td><td>Nobody: a services contract</td></tr> <tr><td><b>Your obligations in Italy</b></td><td>None</td><td>Payroll, filings, year end, accounts, audits</td><td>Checking the relationship stays independent</td></tr> <tr><td><b>Main risk</b></td><td>Low</td><td>Fixed costs if plans change</td><td>Reclassification as employment, with back taxes and contributions</td></tr> <tr><td><b>Monthly cost</b></td><td>Employment cost + €250</td><td>Employment cost + local accounting and payroll</td><td>Contractor fee</td></tr> </tbody> </table></div> </section> <section class="prose"> <h2 id="when-contractors-become-a-risk">When contractors become a risk</h2> <p>If the person works only for you, on your schedule, with your tools and under your direction, Italian authorities can treat the contract as employment. The company then owes the contributions and taxes it should have paid, plus penalties. Converting the contractor into an employee through our EOR service removes that exposure.</p> <h2 id="when-to-move-from-eor-to-your-own-entity">When to move from EOR to your own entity</h2> <p>Usually when the team is large and stable or you need a legal presence for sales. We help set up the company and move the employees over without a break in their employment history.</p> </section> <div class="cta"><a class="btn" href="contact.html">Talk to us about your case</a></div>


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Source: https://hiringitaly.com/italy-eor-vs-entity.html