How to Hire Remote Employees In 


The Basics

Euro (EUR)
Employer Taxes
Payroll Frequency
Official Language

Employment in 


Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Time savings: Hiring through a subsidiary or EOR can take months of onerous paperwork and legal wrangling. This is only multiplied if you want to hire in multiple countries.
Reduced overhead: You can save tens of thousands of dollars in onboarding costs by hiring through a company like Panther. You also have fewer responsibilities to provide benefits, further reducing overhead.
Greater flexibility: Contractors can be brought on as-needed. If they are not a good fit, you can choose not to renew them without incurring significant additional termination costs.
Reduced legal risk: Contractors generally don't have the host of legal protections that typically cover full-time employees.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: While it's important to understand local contractor law, for most firms, misclassification risk is minimal.
Lack of Control: For a worker to be classified as a contractor, they should be allowed to work independently on their assigned tasks. Hiring full-time employees offers a wider range of management options.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.

Set up a subsidiary in 


A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Italy can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Italy, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Italy.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Italy  is not the same as paying workers in your own country. Employees have to be paid using Italy's employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.


 Specific Information

Working Hours

A normal workweek is 8 hours a day and 40 hours a week.


Overtime is limited to 2 hours a day and must be approve by the company.

There is no set overtime pay, however, overtime pay must be more than the regular rate.

Payroll Tax



  • Social Security


          Salary                          Percentage

  • Up to 15,000                0.00%
  • Over 75,000                 43.00%

Minimum Wage

The minimum wage depends on the level of the employee.


Pay Cycle

Salaries are paid on a monthly basis for work between the first and last days of the month. Paydays are the 27th of the month.

13th Salary

Salaries are paid in 14 installments.


Paid Time Off (PTO)

The mandatory minimum number of paid leave is 26 days and employees can carry over the unused days to the following year, however, they must be used by June 31st.  Any remaining unused PTO will be cashed out.   

Employers can decide when the vacation is taken. Also, permission to carry over holidays should be stated in the contract. The employee is to take leave in the following way: 

  • for at least two consecutive weeks in the event of a worker request. or the remaining two weeks, in the 18 months following the end of the vesting year. The leave matures during the employment relationship, from the moment of hiring.
  • PermessiEx-Festività (suppressed holidays) -are given to every employee independently from seniority or National Labour Agreement, and they are given due to 4 bank holidays that were abolished. To make up for those days’ employees would’ve had off they are given 32 hours of leaves to be enjoyed at their leisure. 
  • Permessi ROL (reduction in working hours)-are given to employees starting with their 3rd year of employment and they are 28 hours per year. From their 5thyear of employment, they accrue56 hours per year. 

Public Holidays

There are 11 national holidays and 1 regional holiday.

If a public holiday falls on a Sunday, the day is carried over to Monday or paid in lieu.

Sick Days

For the first three days, the employee is entitled to a 100% payment which is covered by the employer. This applies to the first two illnesses of the year; for the third illness 66% is covered and for the fourth illness 50% is covered. After that, the employee is not covered for the first three days of illness.

From the 4th to the 21st day of the illness the employee is entitled to 75% of the salary of which 50% is covered by the government and 50% by the employer.

From the 21st day onward, the employee is entitled to 100%, of which 66% is covered by the government and the rest by the employer.

Maternity Leave

Mothers are entitled to 5 months of maternity leave. Two months must be taken before birth. The employee will receive a 100% pay. Employers make the payment and can later ask for reimbursement of 80% from the INPS.

Paternity Leave

Within the first 5 months of the child’s birth fathers receive 10 days of compulsory leave and a paid 100% of their salary. An extra optional day of leave as an alternative to the mother.   

New fathers must notify the employer 15 days prior to taking leave.  

If the mother does not take maternity leave (due to death, infirmity, or the father having exclusive custody), the father is entitled to three months’ paternity leave after the birth of the child. These rules also apply if the mother is self-employed. 

Parental Leave

In Italy, an employee is able to take up to 10 months of unpaid parental leave: 

  • For a mother after maternity leave: Can take up to 6 months of unpaid leave 
  • A single parent: Can take up to 10 months of unpaid leave 

If a mother chooses to not take parental leave after maternity leave, she is entitled to work 6 hours a day until the child is 12 months old.

Other Leave

Paid permits, aka “Permessi Retribuiti”, are a special amount of paid leave out of which paid permits can be used only for specific reasons stated in each CCNL, the most common are the following:

  • Handicapping of a family member
  • Family reasons

During the first 2 years of employment: 32 hours per year (only “festivita’ soppresse”)

Third and fourth years of employment: 68 hours per year (36 hours for permits + 32 for “festivita’ soppresse”)

Marriage Leave


Bereavement Leave

In Italy, under “Permessi Retribuiti”, the employee entitled to have a special amount of paid leave.


Termination Process

In Italy, written notice must be given to the employee.   

If a labor court deems the termination unfair, the employer must either reinstate the employee or pay additional compensation.   

Employers must provide notice of termination regarding all types of termination unless it is dismissal due to serious disciplinary reasons. Notice periods can be set in the collective agreement or payment in lieu of the notice period. 

A contract of employment may be terminated in any of the following ways:

  • Resignation
  • Dismissal by the employer (including dismissal for “just cause”)
  • Expiry of a fixed term
  • Mutual agreement
  • Retirement.

Notice Period

The notice period in Italy is:

From Employer:

  • 30 Days notice for Employees
  • 60 notice for managers.

From Employee:

  • 30 Days notice for Employees
  • 45 notice for managers.

Severance Pay

In Italy, employers must set aside funds for severance (TFR) for the employee and is to be paid out to them within 6 months of leaving the company.   

TFR is calculated by: 

  • Taking the gross annual salary from January 1st to December 31st and is divided by 13.5 
  • Deduct the taxable income (pension, social security) and multiply this amount by 0.5% 

Based on an additional percentage by the National Statistical Institute, the final TFR amount is increased.  

Probation Period

Probation period is until 6 months for managerial level up to 2 months of probation for below managerial level.