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Payroll Service and Social Security Representative 

in Italy

Commercial agents or commercial representatives of foreign companies operating in Italy don’t constitute a permanent establishment in Italy; anyway, if the foreign company recruits any employee which perform their activity in Italy the company have to register the contribution position of the employees and also pay to Italian authorities the social security and income taxes.

INPS and INAIL Registration

In order to get the tax code (codice fiscale) the foreign companies have to submit application to the tax authority (Agenzia delle Entrate); after that the foreign investor has to register with:

  • the Istituto Nazionale della Previdenza Sociale (INPS) which is the public body competent for employee’s pension, maternity benefits, unemployment support and other economic measures in favor of employees
  • the Istituto Nazionale per l’Assicurazione contro gli Infortuni sul Lavoro (INAIL) which is the national institute for insurance against injuries of workers, it is competent for supply of medical assistance and financial measures in favor of employees injured or who had an illness at workplace.

Contributions for pension and social security in Italy

The amount of contributions for pension and social security are variable on:

  • rank of employee
  • kind of business
  • size of the business and the rank of the employee.

In Italy the pension and social security scheme contributions for employees are stated by law; these contributions have to be paid by employer to INPS (the public social security body) includes:

  • health
  • life insurance
  • disability
  • maternity
  • family allowances
  • unemployment.

The employer:

  • withholds from the wage of the employee the pension and social security contributions due by the employee
  • pays the part of the contributions directly by the employer.

The social security contributions paid by the employer are deductible from the corporate income tax.

Social Security Representative in Italy

in order to perform such INPS and INAIL registrations and formalities in compliance with Italian laws the foreign investor company has to appoint and give mandate to an accountant or a payroll provider resident in Italy as its Social Security representative. 

The laws on national collective labor agreements is in permanent development and is difficult to interpret.

The CUD document 

The CUD (Certificazione Unica dei Redditi di Lavoro Dipendente) is the final yearly document which must report all employment wages and tax and social security contributions.  

At the middle of March of each year the employers must give to the employees two originals of the CUD concerning the previous year.

The new model of CUD is released every year by the Ministry of Finance which contains the provisions of new taxes.

Payroll services in Italy

In Italy there is not a payroll tax.

The payroll services include: 

  • compliance by the employer
  • payroll customization
  • adjustment with foreign payrolls
  • management of tax and salary payments
  • online filing and payments (so called: pagamento telematico)
  • payroll recovery of double tax credits
  • payroll processing
  • arrangement of the payments into 12 monthly periods
  • relationship with tax and social security authorities
  • multi-contract and multi-employer payroll
  • compliance with severance indemnity (so called: trattamento di fine rapporto)
  • compliance with social security representative
  • compliance with expatriates’annual obligations
  • further non fiscal compliances (eg: rules for equal opportunities, disability and etc)
  • updating of accounting systems following changes in tax, labor and social security laws and rules.

Labor law compliance services in Italy

The compliance with labor laws in Italy include the following services:

  • monthly, quarterly and annual analysis of all variable components of employer’s cost of labor in connection with all various types of all national collective labor agreements (eg: travels, dismissals, leave, benefits, overtime
  • forecast analysis of elements contained in other second level employment agreements
  • management and stipulation of employment contracts
  • assistance for recruitment of skilled personnel
  • selection of the national collective labor agreement (Contratto Collettivo Nazionale di Lavoro, CCNL) to be applied for start-ups
  • assistance in drafting second level company employment agreements (contratti aziendali)
  • assistance for selection of the most fit employment placement agreement;
  • assistance for drafting of atypical agreements
  • assistance for labor litigation
  • assistance and consulting for: collective and individual dismissal, benefiting of fund for ordinary and extraordinary unemployment, solidarity agreements
  • compliance for transfer of business unit (as per art. 2112 of the Italian Civil Code)
  • drafting of documents for mandatory compliance with privacy law concerning employer obligations with respect to workers
  • drafting of pay policies in complying with the company’s internal and external markets
  • selection of fringe benefits, implementation, incentive tools;
  • calculations of bonuses
  • employee data entry.

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