Working in Italy: issues for UK employers to consider

The impact of the COVID pandemic on working arrangements has meant that UK employers are increasingly likely to have staff working remotely from overseas. We have teamed up with experts from our best friend firm Pirola Pennuto Zei & Associati to explain the key legal issues to address where the worker is based in Italy.

Employment rights

Permanent workers based in Italy will be normally entitled to the benefit of Italian employment law, regardless of whether they have an English law contract or a contract that is expressly subject to Italian law. The fact that they are working remotely for a UK employer will not be relevant.

Many of the protections conferred by Italian law will be familiar to UK employers, since they derive from EU law – for example the laws on discrimination and working time.  However the elements of employment protection that derive solely from Italian local law are different, and in some important respects more generous to a worker than the corresponding rights under UK law.

By way of example, Italian Law may grant the UK employee a stronger protection against dismissal which could lead to the reinstatement of the employee in the workplace as well as to payment of all the salaries and social security contributions from the dismissal to the reinstatement.

In addition, the UK employer will need to comply with the health and safety rules established by Italian law, in order to ensure the protection of the employee against any accident at work, including those occurred at home while performing the duties. In this regard, it could be important to assess if an insurance against accidents at work needs to be activated.

Tax and social security

If the worker engaged is resident in Italy, they are subject to a tax rate currently ranging from a minimum of 23% to a maximum of 43% and the employer is required to pay the social security contributions to Italian Social Security Authority (INPS) (currently equal to a minimum of 33 %, of which approximately 9% borne by the employee) on their earnings, even though these are derived from a UK employer. Moreover, effective from 2017, favourable tax regimes and high net worth individual regime could be applicable to the inbound employees who meet certain requirements. The UK employer is therefore advised to appoint a payroll agent in Italy to facilitate the appropriate deductions from the worker’s salary. Income paid by a foreign employer must be reported in the Italian individual’s tax return.

Assuming the worker is not conducting any business on behalf of the employer in Italy, and is simply working from home, the engagement of a sole remote worker is not likely to amount to the creation of a permanent establishment to tax purposes, which would trigger an obligation for the UK employer to pay Italian tax on the income it derives from any operations in Italy, as well as having potential liabilities in relation to the Italian equivalent of VAT.

If the worker is moving from the UK, there is a possibility that for a least the first tax year, they may need be liable for tax in both jurisdictions.  Any adverse impact for the worker would however be alleviated by the UK/Italy double taxation treaty (though it is necessary to apply in advance for treaty treatment to avoid the need to pay double tax up front). 

The same may apply to social security contributions, though there are some exceptions for temporary employment arrangements (known as the “detached worker” provisions) under the UK/EU Trade and Cooperation Agreement, which would avoid the need for social security contributions to be paid in both the UK and Italy.

Company law considerations

The arrangement envisaged above (ie the appointment of a single home-based worker) is not likely to result in a requirement for the UK employer to register with the Italian authorities as an overseas corporate entity.

However the position would be different if the worker is conducting any business on behalf of the employer in Italy, if more than one worker is involved, or if any office or other facilities were to be made available for them to use.


Provided the worker is EU national, there will be no requirement to obtain a visa or work permit.

However if the worker is a UK national they would need to comply with Italian immigration rules, unless they were already resident in Italy as at 31 December 2020. The UK/EU Trade and Cooperation Agreement does not contain any provisions to facilitate new remote working arrangements of the kind envisaged by UK nationals.

In any case, the employee is entitled to stay in Italy for a maximum period of 90 days without any need of applying for a visa and/or for a residence permit.

Further information

This is document is a very brief summary of complex legal provisions. Specific advice should always be sought, based on your organisation’s precise situation.

For advice on Italian law please contact Massimo Di Terlizzi, Partner at Pirola Pennuto Zei & Associati.

For advice on English law please contact David Mills, Employment partner at Mills & Reeve.


Our content explained

Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

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