Article
4 min read
Employer Costs for an Employee in Italy (2026 Guide)
Employer of record
Global hiring
Author
Jemima Owen-Jones
Last Update
February 04, 2026
Quick answer: What is the total employer cost for a $100,000 salary in Italy?
For an employee earning $100,000 USD annually in Italy, employers can expect mandatory employer costs of approximately $39,410 USD per year, bringing total compensation costs to $139,410 USD.
Estimated total employer cost (Italy): ~39.4% on top of gross salary (example estimate).
Hiring in Italy can be a great way to access talent across Europe—whether you’re expanding into the market, building a remote team, or hiring your ideal candidate locally.
But even when two employees earn the same salary, the total employer cost varies by country due to different statutory contributions, payroll rules, and mandatory insurance requirements.
This guide provides a ballpark estimate of the mandatory employer cost of hiring an employee in Italy, using an example salary of $100,000 USD per year.
What’s included in this estimate?
This estimate includes mandatory employer-side statutory costs that may apply when hiring an employee in Italy, such as:
- Onboarding medical check (one-time)
- Health and safety training (one-time)
- Social security contributions
- Family allowances contributions
- Sickness benefit contributions
- Maternity benefit contributions
- Workplace injuries insurance (INAIL)
- Employment insurance contributions
- TFR (termination severance fund) contributions
- Subsidized furlough fund contributions (FIS and CIGS)
What’s not included in this estimate?
This estimate generally does not include additional costs such as:
- Paid annual leave (vacation)
- Sick pay beyond statutory/insured coverage
- Private health insurance (if offered as an additional benefit)
- Employer-provided benefits or allowances beyond those listed
- Bonuses, equity, or commissions
- Equipment and onboarding expenses beyond mandatory checks/training
- Costs that vary by industry, collective agreements, or region
Why employer costs vary in Italy (and globally)
Employer costs can differ depending on:
- Income thresholds and contribution caps
- Industry-specific rules and insurance rates
- Employee classification and contract type
- One-time onboarding requirements (medical checks, training)
- Changes in regulation year to year
- Currency exchange rate fluctuations (if you pay in a different base currency)
Estimated employer cost breakdown for Italy
Below is an estimated breakdown of mandatory employer costs for hiring an employee in Italy earning $100,000 USD/year.
Example salary used in this estimate
- Annual gross salary: $100,000 USD
- Annual gross salary (approx.): €97,069 EUR
Employer mandatory costs (estimated)
| Employer Cost Category | Estimated Annual Cost (EUR) | Estimated Annual Cost (USD) | Notes |
|---|---|---|---|
| Onboarding Medical Check | €1,428 | $1,471 | One-time medical exam |
| Health and Safety Training | €504 | $519 | Mandatory training requirement |
| Social Security | €23,112 | $23,810 | Retirement, healthcare, unemployment coverage |
| Family Allowances | €660 | $680 | Family-related benefits contribution |
| Sickness Benefit | €2,368 | $2,440 | Support during sickness/temporary incapacity |
| Maternity | €233 | $240 | Maternity support contribution |
| Injuries at Work Insurance (INAIL) | €388 | $400 | Workplace injury and occupational disease coverage |
| Employment Insurance | €1,563 | $1,610 | Unemployment/employment support programs |
| TFR Guarantee Contribution | €194 | $200 | Guarantee contribution linked to severance fund |
| TFR Fund (Termination Severance Fund) | €6,707 | $6,910 | Severance fund accrual |
| Subsidized Furlough Fund (FIS) | €514 | $530 | Wage support fund contribution |
| Subsidized Furlough Fund (CIGS) | €582 | $600 | Wage support fund contribution |
| Total Estimated Employer Costs | €38,253 | $39,410 | Total mandatory employer cost estimate |
Total compensation cost (salary + mandatory employer costs)
| Total | EUR | USD |
|---|---|---|
| Gross Salary | €97,069 | $100,000 |
| Mandatory Employer Costs | €38,253 | $39,410 |
| Total Compensation Cost | €135,322 | $139,410 |
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FAQs
How much does an employee cost beyond salary in Italy?
For an Italian employer, the total cost of hiring is typically higher than the employee’s gross salary due to mandatory employer social security contributions, insurance programs, and severance accrual. Even for highly skilled hires, the biggest cost drivers are usually statutory contributions and TFR-related obligations.
What are employer social security contributions in Italy?
Employer social security contributions in Italy are mandatory payroll contributions paid by the employer on top of the employee’s gross salary. These contributions help fund pensions, healthcare coverage, and unemployment-related benefits.
What is INPS social security in Italy?
INPS social security refers to Italy’s national social security system (Istituto Nazionale della Previdenza Sociale). Employers are responsible for contributing to INPS through payroll, and these INPS payments are one of the largest mandatory employer costs in Italy.
Do employers pay income tax for employees in Italy?
No — income tax is generally paid by the employee, but employers must withhold and remit the correct amounts through payroll. Even though income tax isn’t an extra employer-paid cost line item, accurate withholding is essential for compliant payroll processing.
What is Trattamento di Fine Rapporto (TFR) in Italy?
Trattamento di Fine Rapporto (TFR) is a mandatory severance-type accrual that employers must set aside during employment. It is paid to the employee when the employment relationship ends and is a key component of total employment cost in Italy.
Do collective bargaining agreements affect employer costs in Italy?
Yes. Collective bargaining agreements and sectoral agreements (CCNL) can influence total employer costs by setting minimum pay levels, benefits, and employment conditions. These agreements may apply depending on the employee’s role and industry.
What should an employment contract include in Italy?
A compliant employment contract in Italy typically outlines the employee’s gross salary, working hours, probation period, job responsibilities, termination terms, and any applicable collective or sectoral agreements. Clear contract terms help reduce disputes and support compliance.
What leave entitlements should employers plan for in Italy?
Italy has statutory leave entitlements that can include paid annual leave and other protected leave categories. Employers should budget for paid time off as part of total compensation planning, even when it’s not listed as a separate employer contribution.
What are the rules for maternity leave in Italy?
Maternity leave in Italy is a protected statutory entitlement, and employers may have payroll obligations tied to maternity-related benefits. Costs can vary depending on how benefits are funded and administered through the social security system.
Can an Employer of Record help companies hire in Italy?
Yes. If you don’t have a local entity, an Employer of Record can hire on your behalf as the legal employer in Italy, managing employment contracts, payroll, statutory contributions (including INPS), and ongoing compliance—while you manage the employee’s day-to-day work.
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.
