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Phone, internet, and coworking costs can be reimbursed when they are business-related. All require a tax invoice or receipt showing the key transaction details, and tax treatment depends on whether the service is used solely for business or also for personal purposes.
Employment in Italy
Minimum wage
EUR 0
Employer costs
29.80%
Employee contribution
9.19–10.19%
Employee tax
23–43%
In Italy, employment costs combine statutory social security, insurance, and progressive income tax. Employers typically face overall employment-related contributions around 29.80%, including work accident insurance at 0.5% and a TFR INPS contribution at 0.5%, alongside other social security and severance pension costs. Employees contribute to social security at 19.38% of income up to EUR 55,448, and personal income tax is progressive, with headline rates ranging from 23% to 43%. There is no single statutory minimum wage figure specified at national level in this data; pay levels are instead shaped by other rules and frameworks.
Onboarding time
We can help you get a new employee started in Italy fast. The minimum onboarding time we need is only 48 hours. Our team ensures fast, compliant employee onboarding and payroll processing. The onboarding timeline starts once the employee submits all required information via the NEO platform.
Payroll
Payroll in Italy combines employer social contributions, employee social security, and progressive income tax withholding. Employers typically face overall employment-related contributions around 29.80%, including work accident insurance at 0.5% and a TFR INPS contribution at 0.5%, alongside other social security and severance pension costs. Employees contribute 19.38% of income to social security up to EUR 55,448, and income tax is withheld at progressive rates between 23% and 43%, so total deductions vary by salary level.
Employee payroll contributions
| Component | Rate | Income cap |
|---|---|---|
| Social security contribution | 19.38% | EUR 55,448 |
Employer payroll contributions
| Component | Rate |
|---|---|
| Work accident insurance | 0.5% |
| TFR INPS | 0.5% |
Taxes
Italy applies progressive national income tax rates, so higher earnings are taxed at higher marginal rates. The current headline range runs from 23% to 43%, with several income bands in between.
Income tax brackets
| Taxable income band (EUR) | Rate |
|---|---|
| 0 – 28,000 | 23% |
| 28,000 – 50,000 | 33% |
| Over 50,000 | 43% |
Minimum wages
There is no single, clearly defined national minimum wage figure specified here for Italy. Instead, minimum pay levels are typically determined by other legal and contractual frameworks rather than a universal statutory rate in this data set.
Working hours
Standard full-time work in Italy under this policy is based on a five-day workweek from Monday to Friday. The weekly schedule is set in hours rather than days, giving structure to both working time and overtime planning.
Standard working hours
40 hours per week (Monday to Friday)
Leave
Italian employees covered by this policy receive a defined pool of paid time off each year, while sick leave is handled separately. Medical certification rules differ between general paid time off and sick leave.
Annual paid time off entitlement
26 days per year
Sick leave requires a medical certificate from the first day of absence under this policy framework.
Expenses
In Italy, employees must submit, and clients must approve, expense claims in the same calendar year in which the costs were incurred. Prior-year expenses are not accepted, so it is important to keep submissions up to date.
Submission deadlines
| Expense type | Action and deadline |
|---|---|
| Current year's expenses | Submit and approve within the same calendar year |
| Prior year's expenses | Not accepted; must be submitted and approved in the year incurred |
Reimbursements of approved business expenses within the applicable limits are not taxable. If required documentation is missing, the reimbursement becomes taxable. Mileage claims must be supported by a mileage expense report showing the vehicle used and either the trip origin and destination or the total distance traveled; mileage rates vary by vehicle and are published on the ACI website for 2025.
Communication and workspace
| Expense | Taxation |
|---|---|
| Phone subscription | Solely business use: Non taxable; mixed use: Taxable and reclassified as allowance; roaming or SIM abroad: Non taxable |
| Internet subscription | Solely business use: Non taxable; mixed use: Taxable and reclassified as allowance; expenses incurred abroad: Non taxable |
| Coworking | Non taxable |
Equipment and supplies
Laptops, office equipment, office supplies, software subscriptions, and postal charges can be reimbursed when used for business. A tax invoice or receipt must show the date, amount, merchant or service provider, and a description of the purchase or service; some items also require the VAT amount.
| Expense | Taxation |
|---|---|
| Laptop | Non taxable for business purposes |
| Office equipment | Non taxable for business purposes |
| Office supplies | Non taxable |
| Software subscription | Non taxable |
| Postal charges | Non taxable |
Travel
Business travel expenses are broadly non taxable when properly documented. Most items require a tax invoice or receipt with date, amount, merchant or service provider, and a description of the service; some also require the employee’s name, booking confirmations, or other proof of travel.
| Expense | Taxation |
|---|---|
| Business travel insurance | Non taxable |
| Visa fee | Non taxable |
| Accommodation | Non taxable |
| Flight | Non taxable |
| Taxi or rideshare | Non taxable |
| Train | Non taxable |
| Public transport | Non taxable |
| Car rental | Non taxable |
| Mileage | Non taxable |
| Fuel | Non taxable |
| Parking or toll fees | Non taxable for business travel expenses |
Meals and entertainment
Everyday meals, groceries, and business meals with clients or partners can be reimbursed on a non taxable basis when they are business-related and supported by appropriate receipts. Restaurant expenses typically require a transaction receipt in addition to the tax invoice or standard receipt.
| Expense | Taxation |
|---|---|
| Breakfast, lunch and dinner | Non taxable |
| Groceries | Non taxable |
| Meal with client or partner | Non taxable |
Other business expenses
Training, courses, books, promotional items, and gifts to clients can all be reimbursed as non taxable business expenses. Each must be supported by a tax invoice or receipt that clearly describes the purchase or service and identifies the merchant or service provider and the amount paid.
| Expense | Taxation |
|---|---|
| Training, courses, and books | Non taxable |
| Promotional items | Non taxable |
| Gifts to clients | Non taxable |
Per diem
Employers in Italy may provide a flat per diem for employees who travel outside their usual work city on business. Per diem can cover incidental expenses, accommodation, and meals during the trip, and claims must be supported by proof of travel such as itineraries, tickets, or other documents showing travel dates and destination.
| Type of trip | Per diem rate |
|---|---|
| Domestic trip | €46.48 per day |
| International trip | €77.47 per day |
Screen eyewear
Under EU rules, employers must reimburse the cost of protective eyewear and eye exams when they are required because an employee works with screens. The need must be certified through a medical exam or health and safety assessment, and claims must be supported by receipts or tax invoices and, for eyewear, eye exam results and medical certification of need.
| Expense | Taxation | Limit (no pre-approval) |
|---|---|---|
| Screen eyewear | Tax free up to €258.23 per year | €200 per year |
| Eye exam | Tax free up to €258.23 per year | Included in the annual limit |
Bonuses
Bonuses in Italy include both contractual and discretionary payments such as incentives and commissions. They are taxed as regular income, with applicable social security contributions and progressive income tax withheld at source, which can temporarily increase withholding rates in pay periods when bonuses are paid.
Allowances
Allowances in Italy are one-time or recurring benefits that employers can choose to offer on top of salary. All listed allowances are optional, taxable, and may be granted to one or more employees entirely at the employer’s discretion. Clients can request a gross-up when approving an allowance so that they cover the related taxes and social security contributions and the employee receives the intended net amount.
These allowances are processed manually and do not require supporting documentation for payment. Because they are treated as taxable income, they should be used for clearly defined, compensation-like benefits rather than expense reimbursement.
- Car leasing
- Work from home allowance
- Gym membership
- Medical insurance
- Life insurance
- Wellness
- Medical cost
- Relocation
- Utilities
Termination
Italian employment contracts typically include a probation period and notice rules, but the exact terms depend on the individual agreement and applicable frameworks. Within this policy, probation can be relatively long, while minimum notice is not fixed in days here and must be set by contract or other rules.
Maximum initial probation period
Up to 180 days
