Professional Employer Organization (PEO) in Italy

What is a PEO?

A professional employer organization (PEO) is a company that provides human resources, payroll, and employee benefits services to small and medium-sized businesses.

PEOs allow business owners to outsource the management of HR, benefits and payroll which can be time-consuming and complex. This then frees up the business owner to focus on running and growing the business.

It also saves money and time since the traditional methods tend to be very costly to find and hire talent.

Along with PEOs assuming responsibility for payroll taxes and other employment-related taxes, they also ensure compliance with employment laws. This can help businesses avoid costly mistakes and penalties.

If you want to set up a business in Italy and a PEO sounds like a great solution, then you should contact the Skuad team to learn more about what they can do for you.

What are the benefits of using a PEO provider in Italy?

There are many benefits of using a PEO provider, such as Skuad, but here are some of the most important ones.

Save time and money

With a PEO, you don't have to worry about the details of employment compliance. Skuad can take care of everything for you so that you can focus on your business. You will quickly find the talent you need to make your business venture in Italy a success.

Peace of mind

When you partner with a PEO, your employees will be taken care of and that all your compliance obligations will be met.

Flexibility

PEOs offer flexible solutions that can be customized to meet your specific needs. Skuad doesn’t have a one-size-fits all approach – the team accepts that clients have their own needs and demands to be met.

Scalability

With a PEO, it's easy to scale up or down as your business needs change. You won’t have a legal entity so the process is made easier.

Becoming a globally competitive employer

Don’t forget too that setting up a global team will display to your competitors that you are a successful business – and skilled talent around the world will want to work with you.

Save on unnecessary costs

Italy has a lot to offer, from world-renowned companies to small businesses and start-ups.

And, of course, there are plenty of opportunities for talented professionals looking for an exciting and rewarding career.

But there's one small catch. Setting up a business in Italy can be a tricky, especially if you're not familiar with the local employment laws and regulations.

You can save on the costs of global hiring by teaming up with a PEO that knows how to set up HR and payroll in Italy.

Want to hear more about what the Skuad team can do for you? Get in touch with the team today.

Become experienced in a new market

The Italian economy is the world’s eighth largest, and the third largest in the European Union.

To expand into the country means understanding it – and if you don’t have the time or resources to do that, then you need an experienced team of experts who can do this for you.

Enter, PEO’s.

Avoid setting up a legal entity in Italy

When expanding your international business in Italy, you must decide whether to set up a legal entity or use a PEO service. Both have their pros and cons, and the best option for your business will depend on various factors such as cost, time to market and compliance.

The cost of setting up a business in Italy, which includes incorporating a company, can be a costly and time-consuming process. You will need to engage a professional service provider, such as a law firm, to help you with the incorporation.

With a PEO, you can outsource the HR and compliance functions of your business. This can save you time and money, as you won't need to set up your own legal entity or hire staff in Italy.

Become culturally aware

Expanding globally means embracing diversity and inclusion as your company welcomes talent from different backgrounds and cultures.

Understanding culture is important and the Skuad team will ensure your business understands the important things.

For example, did you know that Italy is home to the oldest university in the world, the University of Bologna, which was founded in 1088? Italy also boasts the largest number of UNESCO World Heritage Sites than any other country in the world – 53 in total.

Ensure that your business complies with Italian statutory requirements

If you are a business owner or have employees, you'll know there are various issues to consider for meeting the employment laws in Italy, including HR and payroll.

Payroll

• Employers are required to withhold income tax and social security contributions from their employees' salaries
• The amount depends on the personal tax code, which is based on their income and family status
• Social security contributions are also deducted – they are around 10%

There’s also an employer social security contribution of up to 32%. Remember that tax and social security rates do change – so speak with Skuad for the latest.

Leave

• Employees in Italy are entitled to four weeks of paid annual leave
• Employees may also be entitled to additional paid leave, depending on their contract of employment
• Employees who work shifts or irregular hours may be entitled to additional paid annual leave.

Pensions

• The pension system in Italy is based on notional accounts - employee contributions earn a rate of return related to real GDP growth
• Employees in the private sector will typically contribute 9.19% of their salary to their pension
• Employers contribute (on average) 33% of an employee’s gross salary to their pension plan
• Upon retirement, the accumulated notional capital is converted into an annuity, considering average life expectancy at retirement

The government provides several different types of pension plan. The most common is the contributory pension, which is funded by employee and employer contributions.

There are also non-contributory pensions, which are paid for by general taxation revenue.

Income tax

If you're a foreign resident working in Italy, you're only taxed on the income earned in the country. The tax rates are progressive and range from 23% to 43%.

Additional taxes of up to 3.33% can be levied at regional and local levels.

Italy corporate tax rate

The corporate tax rate is 24%. Additional taxes are due at the regional and local level of up to 3.9% - and more depending on the sector, for example, banking.

With a PEO, you can focus on running your business, while country experts take care of the HR and payroll details. Contact Skuad today to learn more about our PEO services in Italy.

What does it cost to build a team in Italy?

You will need time, patience and money when setting up in Italy.

The Italy company registration fee for a limited liability company is approximately €2,300.

And then you will need accountants – the accounting fee for a limited liability company in Italy starts from €130/month, depending on the number of invoices and yearly turnover.

This can add significant costs to your expansion. You will also need to set up a bank account and register for taxes. The whole process can take several months to complete.

Using a PEO service can be a more cost-effective and time-efficient option for expanding your business into Italy.

Make your first hire in Italy

If you're looking for a comprehensive solution to your HR and employment needs in Italy, a PEO is the perfect option.

And by working with Skuad, you will confidently navigate the complex Italian employment laws and find the best talent for your company.

Contact the PEO in Italy experts today to book a demo and learn more about how we can help streamline your recruitment process and make working in Italy easier than ever.