A Professional Employer Organization (PEO) is one of the most successful ways to run HR for small and mid-sized companies. It takes payroll, benefits, compliance and HR administration off your hands while you keep running your team. Here is how the model works, how it translates to Italian law, and how to get the same result in Italy.
In a PEO arrangement the provider and the client company share the employer role. This is called co-employment. The client directs the daily work, sets salaries and decides who to hire. The PEO runs payroll, pays taxes and contributions, manages benefits and keeps the company compliant. The strength of the model is scale: a small company gets the HR infrastructure, the expertise and often the benefits of a large one.
Italian law gives every employment contract one legal employer, the one registered with INPS and the tax office. Sharing that role formally between two companies, as in the US model, is not provided for. The idea behind a PEO, though, works perfectly in Italy. It simply takes one of two forms, depending on whether you have an Italian company.
We become the sole legal employer in Italy, on an Italian contract under the right CCNL. You choose the person and direct the work, exactly as with a PEO. From €250 per employee per month.
How the EOR worksYour Italian company stays the employer. We act as its outsourced HR and payroll department: contracts, payslips, INPS and INAIL, year-end, HR files. That is the PEO service without the co-employment label. From €55 per payslip.
Payroll outsourcing| PEO (co-employment) | Employer of Record in Italy | |
|---|---|---|
| Legal employer | Client and PEO together | The EOR alone |
| Your entity in the country | Required | Not required |
| Who directs the work | You | You |
| Payroll, tax, benefits | The PEO | The EOR |
| Best for | Companies already established in the country | Entering a country without a local company |
The PEO service is: an Employer of Record if you have no Italian entity, or outsourced payroll and HR administration if you do. Formal co-employment in the US sense is not.
Most US PEOs cover only the US and partner with an EOR abroad. You can work with us directly and receive one invoice a month in USD.
A PEO is usually cheaper per person, but it needs your own entity. For one to five people in Italy, an EOR costs far less than setting up a company. Compare EOR prices.
Yes. When you open an Italian company we transfer the employees and keep running payroll and HR for you, so the PEO-style service continues.