As attractive as self-employment (and the flexibility that goes with it) may be, deciding to leave behind the security of a steady employment contract to become a freelancer can be difficult.
That’s why many people choose to start out by having a freelance sideline while still in employment.
This is generally allowed in Italy as long as it’s not explicitly prohibited by your employment contract.
So if you’re thinking of starting up a side gig as a freelancer, the first thing you should do is read your employment contract carefully (including any inconspicuous small print) to check whether it is permitted by your employer.
While some contracts may allow you to carry out freelance work on the side, you may be required to get express permission from your employer before doing so.
And even if your contract places no specific restriction, it's still generally advisable to be open with your Italian employer about your freelance sideline to avoid any potential issues further down the line.
Once you've overcome this first hurdle, there are a few other important things to consider.
‘Duty of loyalty’
If you start a freelance sideline, keep in mind that you’ll be bound by a "duty of loyalty" (or obbligo di fedeltà in Italian) to your employer under Article 2105 of Italy’s Civil Code.
This means that you cannot engage in freelance activities that directly compete with your employer’s business.
Furthermore, you cannot disclose any of your employer's data, work methods, production techniques, or any other confidential information to other businesses you may work with.
Any breach of this obligation could result in your employer issuing a dismissal letter for "just cause" (giusta causa), which triggers the immediate termination of your employment contract.
Registering with Italy’s tax office
Self-employed workers in Italy need to register with the Italian tax office (Agenzia delle Entrate) by getting a VAT number (Partita Iva) – a government-issued code consisting of 11 digits.
As a Partita Iva holder, you’ll be responsible for covering all of the relevant contributions to Italy’s social security agency Inps, as well as filing yearly tax returns and paying income taxes related to your freelance work earnings (see below).
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Though the process of getting a Partita Iva is free of charge, managing your self-employment tax affairs can be very time-consuming as it involves a significant amount of paperwork, especially when compared to work as an employee.
How much tax will I have to pay?
Italy has two main tax regimes for self-employed individuals.
Under the so-called 'ordinary regime' (regime ordinario), you’ll pay Italy’s standard income tax (Irpef), which ranges from 23 percent to 43 percent of your taxable income depending on how much you earn.
Irpef is based on the three-bracket system below:
- Up to €28,000 of taxable income: 23 percent
- Up to €50,000: 35 percent
- Over €50,000: 43 percent
Please note: Irpef is a progressive tax, meaning that you only pay the higher rate on the portion of your income that’s over the relevant threshold (for instance, 43 percent on the portion of income exceeding 50,000 euros).
Besides the regime ordinario, Italy also has a special 'flat-tax regime' (regime forfettario), which offers a flat tax of just five percent of your taxable income for the first five years of business and 15 percent over the following years.
That said, the flat-tax scheme isn’t available to all self-employed workers. See our guide to see the main eligibility criteria and exceptions.
It's worth pointing out again that, besides income taxes, you’ll also have to pay social security contributions.
The rate varies according to the type of work you do but generally stands around 20 to 25 percent of your taxable income.
Is there a limit to my working hours as a freelancer?
There is no limit to the number of hours you can devote to your freelance gig each week.
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However, Italian career consultants often advise workers to carefully organise their time in order to keep their freelance sideline from getting in the way or even undermining their position as an employee.
Depending on the nature of the freelance activity you are engaged in, you can choose to do it occasionally or on a set schedule (for instance, every day after work hours or on weekends).
Can I have a freelance sideline if I have a work permit?
According to social security agency Inps, holders of a residency permit for employment purposes (permesso di soggiorno per lavoro subordinato) are allowed to carry out “other employment or self-employment activities” alongside the role tied to the permit.
This doesn’t apply to seasonal work permits (permessi di lavoro stagionale).
Please note that The Local cannot advise on individual cases.
For more information, seek the advice of a qualified professional.
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