Payroll guide

Employing in Italy vs the US

The main differences a US company runs into when it hires its first person in Italy. Most of the rules come from the national collective agreement for the sector, not from the employment contract.

TopicUnited StatesItaly
Ending employmentAt-will in most states: either side can end it at any time, for any lawful reason.Dismissal needs a valid reason: just cause, or a justified objective or subjective reason. Unfair dismissal can lead to compensation or reinstatement.
Notice periodNot required by federal law.Set by the collective agreement (CCNL), based on level and seniority. Typically from a few weeks to several months.
ProbationNo legal concept; at-will applies from day one.Allowed if written in the contract. Length set by the CCNL, up to 6 months. Either side can end it without notice.
Paid vacationNo federal minimum.4 weeks per year minimum, at least 2 taken in the year they accrue. CCNLs often add paid leave hours (ROL).
Public holidaysNo federal paid-holiday requirement.12 national holidays plus the local patron saint day. [confirm count for 2026: 4 October holiday]
Sick leaveNo federal paid sick leave; some states and cities require it.Paid sick leave with a medical certificate, covered partly by INPS and partly by the employer as set by the CCNL. Job protected for a period set by the CCNL.
Parental leaveFMLA: 12 weeks unpaid, for eligible employees only.Maternity: 5 months mandatory, paid. Paternity: 10 working days, paid. Additional optional parental leave, partly paid.
Health insuranceUsually employer-provided and a major cost.National health service for everyone, funded by general taxation. Not an employer cost. Some CCNLs add a supplementary health fund.
Employer payroll taxesFICA 7.65% plus federal and state unemployment taxes.About 30% in social contributions to INPS and INAIL, depending on sector and role. [exact rate depends on CCNL and company size]
SeveranceNone required by law.TFR: about 6.91% of annual pay set aside every year and paid when employment ends, for any reason.
13th month salaryNot required.Mandatory under every CCNL, paid in December. Some CCNLs add a 14th, paid in June or July.
Working hoursFLSA: overtime after 40 hours for non-exempt staff; no cap on hours.Normal week is 40 hours. Average including overtime cannot exceed 48 hours. Many CCNLs set fewer normal hours.
Non-competeVaries by state; some ban it.Valid only if written, paid, and limited in time (max 3 years, 5 for executives), place and activity.

General comparison for orientation. US rules vary by state. Italian figures depend on the CCNL applied to the role.

What this means for your budget

In the US the big extra costs are health insurance and benefits. In Italy they are social contributions, the 13th month and the TFR. Health care is not on your bill. Put together, the total cost of an Italian employee is usually well above gross salary, and it is predictable: it follows the CCNL tables.

What this means for planning

Italian employment is designed to be stable. Ending it takes a reason and follows a procedure. Use the probation period properly, write clear role descriptions, and plan notice periods into any change of plans.

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