The contribution amounts for Social Security in Italy depend mainly on the relationship between the company and the individual in question.
Italian Social Security 2015: Employment Relationship
Both the employer and the employee make social security contributions. The employer in Italy must register with the INPS (Instituto Nazionale Previdenza Sociale), also referred to as the Italian Social Security Administration, in order to pay social security contributions for employees.
The total rate for social security is around 40% of an employee’s gross compensation. The rate will depend, however, on the work activity performed by the company, the number of employees the company has and the employee’s position. The shares are:
• Employer’s charge of 30%
• Employee’s charge of 10%
Overall, the total rate paid into the National Pension Fund is 33%. The remaining amount is paid to the Social Security funds below:
• Unemployment Fund
• Sickness Fund (Although not applicable for executives)
• Maternity Fund
• Temporary Unemployment Compensation Fund (ordinary and extraordinary, not applicable to executives)
• Social Mobility Fund (Although not applicable to executives)
• Other Minor Funds
For employees who have registered with the INPS after 01.01.1996, and have never held a position in the Italian social security system, their social security contribution is determined and paid up to a €100,123 maximum amount.
Italian Social Security 2015: Employment Relationship For Executives
In relation to social security, executives (dirigenti) owe:
• INPS (National Mandatory Pension Fund): 9.19% on the income up to €46,031 for income and 10.19% on the excess above the maximum amount.
• Fondo Mario Negri (Complementary Pension Fund): 1% is due on a notional annual remuneration of €45,940
• Fondo Pastore (Supplementary Pension Fund): Entity consists of a combination of insurance and investment (not compulsory), and is required to contribute €464.81 per annum.
Any industrial executive is obliged to make contributions of:
• INPS: 9.19% on income to a ceiling of €46,031 for income and 10.19% on the excess above the maximum amount.
• Findo Assistenza Sanitaria Industria or FASI (Medical Care Fund): A flat contribution of €880.
• Fondo Previdenza Dirienti Azienda Industriali or PREVINDAI (additional pension fund): 4%, up to a maximum annual income of €150,000
Italian Social Security 2015: Self-Employment Relationship
Those who are Self-Employed, not VAT registered and not covered by the mandatory private pension fund are required to be recorded with INPS. This places the individual into a lawful ‘separate social security regime’.
This ‘Separate Social Security’ command stipulates three different rates, as shown below:
• Individuals enrolled in other mandatory contribution regimes: 22%
• Individuals with a VAT number enrolled in an exclusive way into the separate social security regime: 27.72%.
• All other individuals enrolled in an exclusive way into the separate social security regime: 28.72%
All of these percentages are applied up to the legal limit. The split is applied with:
• A two thirds charge to the company
• One third is charged to the collaborators