Italy is one of Europe’s most attractive markets for global expansion in 2025. With a strong industrial base, skilled talent pool, and strategic location in the EU, Italy offers unmatched opportunities for companies entering sectors like technology, fashion, automotive, and finance. However, Italy’s labor laws, tax structures, and collective bargaining agreements (CBAs) make direct hiring complex especially for companies without a local entity. This is where a PEO (Professional Employer Organization) or Employer of Record (EOR) becomes an essential partner, enabling businesses to hire and operate seamlessly while staying compliant with Italian labor regulations.
Table of Contents
- What Is a PEO in Italy?
- PEO vs EOR in Italy What’s the Difference?
- Why Use a PEO in Italy Instead of Setting Up an Entity?
- Key Employment Insights in Italy (Handled by Asanify)
- Cultural Alignment and Professional Etiquette
- How a PEO Helps With Payroll, Tax & Benefits
- Italian Labor Laws Made Simple With a PEO
- Asanify’s Advantage: Modern PEO for Italy
- What Does It Cost to Build a Team in Italy?
- When to Choose a PEO in Italy
- How to Get Started with Asanify’s PEO in Italy
- FAQs
What Is a PEO in Italy?
A Professional Employer Organization (PEO) in Italy is a strategic partner that manages HR, payroll, and compliance functions while allowing businesses to retain operational control over their workforce. Acting as a co-employer, a PEO like Asanify supports you with:
- Payroll processing in EUR
- Social security and INPS (Istituto Nazionale della Previdenza Sociale) filings
- Employment contract drafting aligned with CBAs
- Statutory and supplementary benefits administration
- HR compliance documentation and filings
- Assistance with local labor inspections and audits
This model is ideal for startups, SMBs, and fast-scaling enterprises that want to expand globally without establishing a subsidiary in Italy.
With Asanify’s PEO services, you can hire in Italy and 160+ other countries with confidence. We handle payroll, benefits, and compliance, ensuring your team receives locally compliant compensation while you focus on growth.
PEO vs EOR in Italy – What’s the Difference?
While both PEOs and EORs simplify hiring without the need for extensive infrastructure, their structures differ:
| Feature | PEO in Italy | EOR in Italy |
| Legal Employer | Client (shared employer) | EOR provider (full legal employer) |
| Entity Requirement | Requires a local entity | No entity required |
| HR & Payroll | Managed jointly with client | Fully managed by EOR |
| Best For | Companies with existing entity | Startups/scaleups testing Italy |
| Immigration & Visas | Handled by client | Managed by EOR provider |
| Contract Ownership | Client issues compliant contracts | EOR issues contracts |
| Switching to Entity | Already in place | Smooth migration supported |
Why Use a PEO in Italy Instead of Setting Up an Entity?
Partnering with a PEO in Italy allows businesses to hire quickly, remain compliant, and avoid the heavy costs of setting up a local entity. It eliminates administrative and legal burdens while giving you flexibility to test and expand in the Italian market with ease.
Hire Top Talent in Italy
Italy’s workforce is rich in engineers, designers, financial experts, and multilingual professionals. With a PEO, you can:
- Recruit quickly without waiting months for entity setup
- Access talent in Milan, Rome, Turin, Bologna, and Florence
- Provide competitive, compliant salary packages
Build Your Employer Brand Globally
Employees in Italy expect transparent contracts and strong protections. Asanify ensures your brand is perceived as compliant and attractive by:
- Offering benefits aligned with Italian CBAs
- Structuring fair working hours and leave policies
- Ensuring transparent payroll documentation
Reduce HR & Legal Overhead
Setting up an entity in Italy involves complex registrations with chambers of commerce, INPS, INAIL (workplace accident insurance), and the tax authority. A PEO eliminates these upfront costs and risks.
- No need to navigate Italian bureaucracy
- Avoid costly misinterpretations of CBAs and labor law
- Save significantly on legal and compliance consulting
Test and Expand into Italy Easily
A PEO allows you to validate Italy’s market potential before committing to a full entity.
- Hire one or more employees quickly
- Expand regionally across northern and southern Italy
- Scale flexibly as your operations grow
Suggested Read: The Complete 2025 Guide to Labour Laws in Italy
Key Employment Insights in Italy
Italy’s employment framework includes mandatory social security contributions, a 13th salary, and strong protections under CBAs. Employers must comply with strict payroll cycles, tax filings, and leave entitlements, which a PEO helps manage seamlessly.
Payroll
- Payroll cycle: Monthly, by the 27th
- Employer social security contributions: ~30%–35%
- Employee social security contributions: ~9%–10%
Leave Policies
- Public holidays: 11 annually
- Paid vacation: Minimum 4 weeks per year
- Sick leave: Covered by employer and INPS depending on duration
- Maternity leave: 5 months (2 before birth, 3 after) with 80% pay
- Paternity leave: 10 days (mandatory) + optional leave
Bonuses & Benefits
- 13th-month salary mandatory in December
- In many sectors, a 14th-month salary is also common
- Meal vouchers, company cars, and private healthcare are standard perks
Income Tax Brackets (2025)
- 23% up to €15,000
- 25% for €15,001–€28,000
- 35% for €28,001–€50,000
- 43% above €50,000
Cultural Alignment and Professional Etiquette
Operating in Italy requires cultural sensitivity:
- Strong emphasis on hierarchy and formality in business settings
- Relationship-building is critical to long-term success
- Regional differences: Northern Italy (business-oriented, punctual) vs Southern Italy (relationship-driven)
- Contracts and CBAs are strictly enforced compliance is non-negotiable
How a PEO Helps With Payroll, Tax & Benefits
A PEO in Italy streamlines payroll processing, manages INPS/INAIL contributions, and ensures accurate tax filings. It also administers statutory benefits like the 13th salary, meal vouchers, and healthcare, keeping employees compliant and satisfied.
With Asanify as your Italian PEO partner, you gain:
- Payroll calculations and disbursements in EUR
- Management of INPS and INAIL contributions
- Administration of 13th/14th-month pay, meal vouchers, and insurance
- Filing of taxes and compliance with CBAs
Italian Labor Laws Made Simple With a PEO
A PEO simplifies Italian Labor Laws by managing CBAs, working hour limits, probation rules, and termination requirements. This ensures compliance while protecting both employers and employees from legal risks.
- Working Hours: Typically 40 hours per week, overtime regulated by CBAs
- Probation: Between 3–6 months depending on contract type
- Termination: Notice periods vary by seniority; severance governed by law (TFR – Trattamento di Fine Rapporto)
- Unions & CBAs: Majority of employees fall under sectoral collective agreements
Asanify ensures your workforce stays aligned with these labor protections.
Asanify’s Advantage: Modern PEO for Italy
We combine automation with local expertise to simplify compliance:
- End-to-end onboarding in under 5 days
- Real-time payroll compliance checks
- Automated HR documentation and filings
- Local legal experts for sector-specific CBAs
- Transparent pricing with no hidden fees
What Does It Cost to Build a Team in Italy?
Building a team in Italy can be costly if you set up a local entity, with expenses ranging from legal registrations to ongoing compliance fees. Using a PEO offers a faster, more affordable option, with predictable monthly costs and no heavy upfront investment.
Option 1: Setting Up a Local Entity in Italy
- Requires registering with Registro delle Imprese (Business Register)
- INPS, INAIL, and tax authority registrations mandatory
- Costs: €15,000–€30,000+ upfront
- Timeline: 8–12 weeks
Option 2: Hiring Through a PEO in Italy
- No local entity needed
- Onboard employees in under a week
- Asanify handles payroll, taxes, and HR compliance
- Indicative Monthly Pricing (2025):
| Service Type | Starting From (Per Employee/Month) |
| PEO Solution | $49 USD |
| EOR Solution | $199 USD |
When to Choose a PEO in Italy
A PEO is best suited when you:
- Want to enter the Italian market quickly without waiting months for entity setup
- Plan to hire a small or distributed team in cities like Milan, Rome, or Turin
- Need to test business opportunities in Italy before creating a subsidiary
- Want to reduce the administrative, legal, and compliance complexities of CBAs (Collective Bargaining Agreements)
- Prefer to focus on growth while delegating payroll, tax, and HR compliance to experts
Suggested Read: A Detailed Guide on Employer of Record Italy 2025
How to Get Started with Asanify’s PEO in Italy
Getting started with Asanify’s PEO services in Italy is simple and efficient. First, schedule a free consultation with our team to define your hiring strategy and compliance requirements under Italian labor laws. Once we finalize the scope, you’ll sign a PEO or EOR agreement with Asanify. From there:
- We onboard employees through our automated platform
- Employment contracts are aligned with Italian CBAs
- Payroll processing, social security (INPS), and workplace insurance (INAIL) contributions are managed
- Benefits such as 13th/14th salary, meal vouchers, and statutory leave are administered seamlessly
As your business grows, you can scale your workforce across Italy with ease or transition to your own local entity with our dedicated transition support.
FAQs
A PEO requires your company to have a local entity and acts as a co-employer handling HR functions, while an EOR becomes the full legal employer, allowing you to hire in Italy without setting up a subsidiary.
Onboarding typically takes 5–7 business days, with contracts drafted under Italian labor laws and CBAs, ensuring payroll and benefits are fully compliant.
Yes, Asanify supports visa sponsorship and immigration compliance, helping you bring international talent into Italy legally and efficiently.
Hiring through a PEO usually costs between €400–€900 per employee/month, depending on role complexity, benefits, and compliance requirements.
Yes, a PEO requires a local legal entity in Italy. If you don’t have one, you can use an EOR, which eliminates the need for entity setup.
Payroll is processed monthly with gross-to-net calculations, INPS/INAIL contributions, tax withholdings, and benefits handled by the PEO.
The 13th salary is mandatory in Italy, while a 14th salary is common in many CBAs, especially in manufacturing, banking, and retail sectors.
Yes, Asanify provides full transition support, helping you smoothly migrate employees from PEO to your own Italian entity when ready.
Asanify combines automation, real-time compliance monitoring, and local expertise to simplify HR, reduce manual work, and scale with your business.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
