When do you graduate from an EOR to your own Italy entity?

The calculation below uses EUR 549 as the illustrative EUR equivalent of the Teamed fee. This is illustrative, not a fixed EUR price. The actual EUR amount depends on the exchange rate at the time of invoice. Teamed charges from $599 USD with zero FX mark-up.

All entity cost figures in this table are typical ranges. They cover outsourced payroll, CCNL-compliant bookkeeping, statutory filings, and HR admin for a small Italian S.r.l. They are illustrative, not law figures. Actual costs vary with the CCNL you apply, the benefits programme you run, and whether you need a dedicated direzione risorse umane function.

Italy also requires employers to pay TFR (Trattamento di Fine Rapporto), the severance accrual at annual gross divided by 13.5 per year. TFR applies on both sides of the comparison. It does not change the crossover calculation but it does add to total employment cost on both sides equally.

Employer INPS at 30% applies on both sides. Italy bundles pension within that same INPS rate. At higher Italian tech salaries the INPS line grows on both sides equally, so it does not shift the crossover but it does make per-head total cost higher than in most comparable EU markets. Run the Crossover Calculator with your own headcount and salary band.

1. Calculate the EOR cost

   Multiply the Teamed fee (from $599 USD) by your planned Italian headcount. This is the fixed variable cost. It grows linearly as you hire.

2. Estimate the entity fixed overhead

   Typically EUR 3,800 to 5,500 per month for a small Italian S.r.l. This covers payroll bureau, bookkeeping, INPS/INAIL filings, and first-point HR. This cost does not grow much until headcount exceeds 15.

3. Find the crossover headcount

   The crossover is where EOR monthly cost equals entity monthly overhead. For most Italian tech salary bands, this is typically around 6 to 9 employees. Use the Crossover Calculator for your own numbers.

4. Factor in non-financial triggers

   The maths gives you a headcount threshold. Equity compensation, CCNL control, and market-validation reversibility are separate questions that may override the cost crossover in either direction.

5. Plan the graduation date

   Allow 10 to 14 weeks for entity formation before the first payroll on your own entity. The bank account dependency is the gating step in Italy. Start the GEMO process while EOR continues running.

These are typical ranges. They are not law figures. There is no law that sets what an Italian S.r.l. costs in professional fees to form. The range reflects real market rates for notarial and corporate services. It varies with how much substance and professional involvement your structure needs.

Why the bank account is the hidden bottleneck

Italian business bank accounts for foreign-parented companies have tightened in recent years. Expect 4 to 10 weeks from application to an opened account with most Italian banks. The notarial deed cannot be lodged until the share capital is paid into the bank account. This creates a sequencing dependency that turns a 4-week incorporation into a 10 to 14 week wait before the first payroll. Plan for it before you set the first payroll date.

These figures are typical market ranges for a small Italian S.r.l. with 1 to 15 employees. They are illustrative. They are not law figures. Actual costs depend on the CCNL you apply, whether you outsource to a commercialista or hire in-house, and the size of your benefits programme.

Above 15 employees, dedicated Italian HR capacity and an in-house finance function typically become necessary. The cost band widens at that point. Italy's mandatory 13th monthly salary (tredicesima) and some CCNL-mandated 14th salary are already built into payroll service fees in the table above.

Most cost comparisons skip the administrator-liability dimension because it is hard to put a number on. It is worth naming explicitly before you decide.

Personal administrator duties

Under Italian Civil Code articles 2392 to 2395, every S.r.l. administrator must act with the care and diligence of a good manager, avoid conflicts of interest, and ensure correct filings with the Chamber of Commerce, Agenzia delle Entrate, INPS, and INAIL. An administrator who signs accounts they have not verified is personally on the hook for any misstatement. These are personal duties. They cannot be outsourced to a commercialista.

The compliance treadmill

• Chamber of Commerce annual filing: by 30 June each year for the prior-year accounts. Late means an automatic penalty that escalates over time.
• Statutory accounts: approved by shareholders within 120 days of year-end (or 180 days in certain cases). Late approval triggers personal liability for administrators.
• Corporate income tax (IRES) return: within 9 months of year-end. Late filing carries penalties and interest.
• INPS contributions: F24 payments by the 16th of the following month. Late payment attracts interest and sanctions.
• INAIL annual declaration (autoliquidazione): annually in February. Incorrect classification leads to back-premiums.
• Withholding tax (IRPEF ritenute): remitted via F24 by the 16th of each month.

Each obligation is individually manageable. Stacked across a year, they consume real management attention and commercialista cost. An EOR carries all of these on its own entity.

• Under 6 Italian employees on average salaries: EOR is cheaper and faster every month. The entity overhead has nothing to amortise against.
• Market validation phase: you are hiring 1 or 2 people to test commercial fit. Entity setup commits EUR 10,000 minimum capital plus professional fees and management attention before you know whether Italy will deliver.
• Project-based hires: 6 to 12 month engagements where the formation cost will not amortise before the project ends.
• Below the works-council trigger: Italian law creates increased consultation rights and labour protections above 15 employees. Below that level, there is less structural pressure to have your own entity for people-management reasons.
• TFR accrual uncertainty: if you are unsure about tenure length, TFR accrues throughout employment with no cap. An EOR carries that accrual liability. If you form your own entity and then wind it down, TFR must be paid in full at termination.

• Sustained headcount above 9 Italian employees at average salaries: the entity overhead amortises across enough people that per-head cost falls below the EOR fee.
• Equity compensation via stock options or profit sharing: Italian tax-favoured equity plans require your own Italian entity. An EOR cannot issue these on your behalf.
• CCNL flexibility: applying your own CCNL directly gives you more control over role classifications, probation terms, and overtime rules than a shared-CCNL EOR arrangement provides.
• Tax-treaty substance: some cross-border tax structures need actual Italian substance (employees, address, banking) in your own entity. EOR employment does not count as your substance for corporate tax purposes.
• Above 15 employees: once you cross the 15-employee threshold, unfair-dismissal compensation caps increase, works-council consultation rights attach, and collective redundancy procedures apply under Law 223/1991. Having your own entity with dedicated HR gives you more control over these obligations.

The technical mechanic is contract novation: the employment contract transfers from Teamed Italy S.r.l. to your new entity on a specified date. All terms carry across. Salary, CCNL classification, annual leave entitlement of 4 weeks, TFR accrual, and continuous service date all remain unchanged. The employee sees a different employer name on their payslip. Nothing else changes.

What we do operationally:

• Stand up your Italian S.r.l. through GEMO, typically 10 to 14 weeks, while EOR continues running in parallel.
• Handle the notarial deed, Chamber of Commerce registration, and INPS/INAIL employer registration for the new entity.
• Open the entity payroll scheme with the correct CCNL applied.
• Novate every active employment contract on a single effective date.
• Migrate TFR accrual balances and ongoing benefits without any lapse.
• File final EOR-period INPS submissions and open new INPS obligations on the entity from the novation date.
• Provide the same Italian People Ops specialist as the post-graduation primary contact.

The bank account sequencing in Italy is the most common delay. We start the banking process before the notarial deed is finalised. The Graduation Model accounts for this timing dependency so that EOR does not lapse while you wait for a bank account decision.

Real HR and legal experts handle your Italian hires from the first offer letter through every INPS submission, F24 payment, and year-end CU form. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Every employer cost passes through at cost, itemised on every invoice. You see the INPS employer line at 30%, the annual leave entitlement for 4 weeks, and the TFR accrual line. Nothing is hidden inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on one platform. Run the Crossover Calculator to see the month the model flips. Start from the Italy hiring overview. Key sources: INPS, Agenzia delle Entrate, and the Ministero del Lavoro.