Hire your first employee in Italy: contracts, cost and steps

On 11 June 2026 INPS opened online applications for the Bonus giovani 2026, which takes up to €500 a month off the employer’s contributions for qualifying under-35s hired on an open-ended contract this year. Good news, if your first hire qualifies. It doesn’t change the bigger number. In the worked example below, a €35,000 salary costs the company about €48,400 a year.

This guide covers what it takes to hire your first employee in Italy as a startup: the contract, the real cost, the incentives INPS is paying in 2026, the extra room innovative startups get and the steps before day one. New to all this? Start from the beginner’s map from zero to a first round.

Which contract? Open-ended, fixed-term, apprenticeship or collaboration

Start with the default. Italian law calls the open-ended contract (tempo indeterminato) ‘the common form’ of employment, and the 2026 hiring bonuses below apply only to it. Everything else is an exception, with limits of its own.

Contract	Main rules in 2026	When founders use it
Open-ended (tempo indeterminato)	The legal default (art. 1, D.Lgs. 81/2015). The only form that qualifies for the 2026 hiring bonuses.	A role you’ll still need in two years
Fixed-term (tempo determinato)	Up to 12 months with no stated reason. Up to 24 months only in cases set by collective agreements, for needs the parties identify (allowed until 31 December 2026) or to replace someone. At most four extensions in 24 months. Capped at 20% of open-ended staff, but an employer with up to five staff can always hire one.	Testing a new role, covering a leave
Professionalising apprenticeship (apprendistato)	Ages 18 to 29. Written contract, at least six months, at most three years (five for craft profiles). The CCNL may place the apprentice up to two levels lower.	A junior you’ll train on the job
Collaboration (co.co.co.)	INPS gestione separata at 35.03% in 2026, two thirds paid by the company. If the company organises how the work is done, employment rules apply anyway (art. 2, D.Lgs. 81/2015).	A defined, autonomous project

Two lines deserve a second look. Only the first 12 months of a fixed-term contract need no reason; after that, extensions and renewals need one, or the contract turns open-ended. And a collaboration isn’t a cheaper employee. Set the hours and the method, and the law treats the person as staff.

A freelancer on a partita IVA, the self-employed VAT number, raises the same question, plus one about code. Under Italian copyright law the employer owns the economic rights to software an employee writes on the job, unless agreed otherwise. Employees only. With anyone else, write the IP terms into the contract.

How much does an employee cost in Italy? A worked example

Let’s put numbers on it. The company is invented, the rules are real, and the two rates we had to assume are labelled.

Say a software startup in Milan hires its first developer at €35,000 gross a year. That figure, the RAL (retribuzione annua lorda), already includes the extra monthly payments: under a national collective agreement (CCNL) that pays 14 instalments, as commerce does, it’s €2,500 a month. The tredicesima, paid in December, is due to every employee. The quattordicesima exists only where the CCNL provides for it.

Per year	Amount	How it’s worked out
Gross pay (RAL), 13th and 14th payments included	€35,000	14 × €2,500
Employer INPS contributions	€10,500	Assumed at 30%: Fiscozen puts the usual range at 28% to 33% of pay
INAIL accident insurance	€350	Assumed at 1%, Fiscozen’s estimate for many office jobs; INAIL sets your real rate by risk class
TFR, the severance pay accrued each year	€2,593	Pay divided by 13.5 (Civil Code art. 2120)
Total cost to the company	€48,443	1.38 times gross pay, about €4,037 a month
First 12 months with Bonus giovani, if the hire qualifies	€42,443	Up to €500 a month less in employer contributions

How solid is the 30%? The OECD’s Taxing Wages 2026 puts all employer contributions for Italy’s average worker at 24.0% of labour costs in 2025, about 31.6% on top of gross pay. At 28% or 33% our total would fall by €700 or rise by €1,050. For scale, the average Italian employee earned €36,594 gross that year and cost €48,150 (OECD figures, via Assolombarda).

What the table leaves out: the employee’s own contributions (about 9.5% of gross, on the OECD average) and income tax, which come out of the €35,000. TFR (trattamento di fine rapporto) isn’t optional either. It accrues every year, is revalued each 31 December at 1.5% plus three quarters of ISTAT inflation, and is due whenever the job ends.

Now read it the way an investor will. One developer at about €4,040 a month adds that much to your burn rate, the cash you spend each month, and shortens your runway, the months of cash left. Our guides on how to calculate burn rate and runway and on a startup financial model you can defend show where each hire belongs. Paying yourselves too? See founder salary after a round.

If you’d rather not build the hiring plan from scratch, our financial model template (Excel, €129) already prices hires at Italian employer costs, five years month by month, next to runway and scenarios.

Hiring incentives in 2026: what INPS is paying

Three exemptions come from the ‘decreto Primo Maggio’, decree-law 62 of 30 April 2026, converted by Law 112 of 25 June 2026. Each covers open-ended hires made in 2026 and waives 100% of the employer’s social security contributions up to a monthly cap (INAIL premiums stay). You apply online on INPS’s Portale delle Agevolazioni.

• Bonus giovani (INPS circular 55/2026). Under-35s who count as disadvantaged under EU rules, say six months without a regular paid job, or aged 15 to 24: up to 12 months. Very disadvantaged, such as 24 months without one: up to 24. Cap €500 a month, €650 in the ZES regions (the South, Marche and Umbria). Applications opened on 11 June 2026.
• Bonus donne (circular 57/2026). Women of any age, same logic, 12 or 24 months. Cap €650 a month, €800 for women living in a ZES region. Open since the same day.
• Bonus ZES (circular 56/2026). Employers with up to ten staff, work in a ZES region, a hire aged 35 or over and jobless for 24 months: up to €650 a month for 24 months.

Conditions are where small companies trip. You need a regular DURC, the certificate that your contributions are paid, and must pay at least the full economic treatment of your sector’s main CCNL, a rule the 2026 decree tied to every incentive. Headcount must rise, which a first hire does by definition. The bonuses don’t stack with other contribution exemptions, apprenticeships are out, and money is capped: €109.7 million for the youth bonus in 2026.

Narrower measures exist too, such as up to €8,000 a year for hiring a mother of three or more children under 18 (INPS circular 82 of 29 July 2026). Notice the pattern? The bonus depends on who you hire, not on your company.

Innovative startups: extra room on contracts and equity

If your company is registered as an innovative startup, the special status for young tech companies, labour law gives it slack for four years from incorporation. The 20% cap on fixed-term staff doesn’t apply, and neither do article 21’s limits on extensions and renewals, such as the four-extension ceiling. Article 19’s duration rules aren’t on that list, so ask your consultant before planning a long chain of contracts.

Equity is the other lever. Under article 27 of decree-law 179/2012, shares or options an innovative startup grants to employees, directors and continuing collaborators don’t count as income, for tax or for contributions, unless the company or a related one buys them back. Our guides explain how stock options are taxed in Italy and how big an employee option pool should be.

Hiring can also help you keep the status. One of the three alternative requirements is about people: for example, at least a third of the workforce with a research doctorate, or two thirds with a master’s degree. The full list is in our guide to Italy’s innovative startup requirements.

How to hire your first employee in Italy, step by step

1. Fix the job and the CCNL. Tasks, level, gross pay, start date. Your sector’s national contract sets minimum pay by level and the number of monthly payments.
2. Decide who runs payroll. You can do it yourself or through your own staff; otherwise Law 12/1979 reserves it to consulenti del lavoro (payroll consultants) and other registered professionals, such as commercialisti and lawyers. When payroll, accounts and forecasts need one owner, read when a startup needs a CFO.
3. Open the employer positions with INPS and INAIL if the company has never had staff. ComUnica, the single filing at the Chamber of Commerce, reaches both.
4. Check the bonus before you sign. Apply for the youth bonus before hiring and INPS sets the money aside; you then have ten days to send the hiring notice.
5. Do the safety work first. Your first employee makes you an employer under the safety code (D.Lgs. 81/2008), whatever your size. Date the risk assessment (DVR), appoint the safety officer (RSPP, a role you can take after a course), name first-aid and fire wardens and train the worker, all before day one. A missing DVR risks three to six months’ arrest or a fine of €3,071 to €7,862.
6. Put it in writing. Legislative Decree 104/2022, known as the transparency decree, lists the minimum information you owe the employee. Give it in the contract or in the hiring notice. An unwritten fixed-term clause has no effect.
7. Send the UNILAV online to the service of the region where the job is based, by midnight on the day before work starts. Collaborations and internships need one too.
8. Run the first payroll. Your consultant prepares the payslip and the monthly payments and filings.

Checklist before you sign the offer

• Gross pay, level and CCNL agreed, with 13 or 14 instalments.
• Full cost in the model from the start month, runway rechecked.
• Candidate’s work history checked against the bonus rules. Before the contract, not after.
• DVR, RSPP course and training booked.
• Equity decided, if any, and IP terms in the contract.
• UNILAV drafted for the day before.

This article is general information, not legal, tax or employment advice. Contribution rates, incentives and their deadlines change: check the INPS circulars and ask a payroll consultant before you hire.