Employee Benefits in Italy

Bonuses and additional payments

In Italy, labor law mandates a 13th-month salary, known as tredicesima, equivalent to one month’s wage, typically paid in December. Additionally, certain collective agreements stipulate a 14th-month salary, or quattordicesima, usually disbursed in June. These bonuses are considered part of the employee’s regular compensation and are subject to standard tax and social security deductions. Employers must apply the same calculation method for all eligible employees to ensure compliance with labor regulations.

Annual leave

Employees in Italy are entitled to paid vacation leave as soon as they start employment. The statutory entitlement is a minimum of four weeks (20 working days) per year, with at least two consecutive weeks to be taken during the year of accrual. This leave is fully paid and can be taken throughout the leave year, as agreed between employer and employee.

Additional leave may be offered as part of an employment contract or collective bargaining agreement, though it is not required by law. Many employers offer enhanced leave policies to stay competitive and improve retention. 

Unused statutory leave may be carried over to the following year but must be used by June 30 of that year. Payment in lieu of unused leave is only permitted upon termination of employment.

Sick leave

The amount of sick leave guaranteed to an employee is determined by their collective agreement. In many cases, Italy’s Istituto Nazionale della Previdenza Sociale (INPS) will cover the entire cost of paying employees while they are ill. Employees must provide a medical certificate from a doctor to receive sick day. Under Italian law, many employees are also guaranteed not to be terminated from their job during their illness. 

In addition, Italian employees are guaranteed sick child leave — time off to care for adopted or birth children aged eight or under. For children aged three to eight, workers are given five days off per year. For children under three years, workers may take off for the entire duration of the child’s illness. Although this time doesn’t have to be paid under Italian law, employers may elect to pay employees as an added benefit.

Parental leave

In Italy, parents are entitled to 10 months unpaid time off for every child — 11 months if the father is taking three months’ leave or more. Each parent may not take more than six months individually. Single parents are entitled to 10 months (unpaid) leave.

This leave can be taken non-consecutively and can even be taken hourly. Parents may take this leave up to 12 years after the birth or adoption of their child. If the child is disabled, they may be eligible for more leave (up to three years).

Instead of full leave, parents may also request conversion to part-time status; employers must respond within 15 days.

Additional benefits

In addition to the above, there are several benefits covered by social security contributions.

• Pensions: Provides retirement income
• National Health Service (SSN): Offers comprehensive healthcare services
• Unemployment insurance: Supports employees during periods of involuntary unemployment 

Many employers also offer supplemental benefits, such as meal vouchers, transportation allowances, private health insurance, or company-provided mobile phones. These additional benefits help improve retention and employer branding.

As your employer of record in Italy, we help design compliant and competitive benefit packages that align with statutory obligations and local market expectations.