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Hiring in San Marino? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in San Marino.
Employment Norms in San Marino
San Marino is a tiny country located in Europe and surrounded by northern Italy. Being a free-market economy, the norms and laws in San Marino are business and employee-friendly. However, new employers may find it difficult to abide by the various local norms and regulations. EOR services ensure legal compliance by bridging this gap. Even though San Marino is not a European Union (EU) member state, it uses Euro as its currency.
General Information:
- The currency of San Marino is Euro (EUR).
- San Marino is the capital of San Marino.
- Italian is the official language of San Marino. Documentation must be in Italian to be considered legally valid.
- As of 2020, the GDP of San Marino was reported to be USD 1.54 billion.
Employment norms in San Marino are dictated by the relevant departments or ministries as well as the collective bargaining agreements.
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking Hours and OvertimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
- National collective agreements determine most entities of individual labor contracts in San Marino.
- It is mandatory to have the employment contract in Italian to be valid.
- The agreements and contracts must include details such as pay, working hours, severance, day-offs, termination, notice period, etc.
- The agreement can either be a permanent or a fixed-term contract. For permanent jobs, a fixed-term contract cannot be used.
Onboarding Process
There is no defined onboarding process in San Marino. However, the following are some common best practices that are usually followed.
- The employee must be given a copy of the employment agreement or contract.
- Adequate training must be given to the employee for the new role.
- Ensure that the new employee is enrolled with social security and other relevant institutions.
Visa
The following are the two types of work permits required to work in San Marino.
- Stay permit: This type of permit is used for short stays - three months to one year. These can be renewed.
- Registered residence permits: These are required for long stays or permanent residency. Holders of this permit enjoy the rights and benefits of citizens of San Marino.
- Elective residence permit: This is a limited residence permit with only a few benefits and employment-related services. The applicant may change this permit to a registered residence permit after 10 years of holding the elective permit.
The following are some of the documents required to obtain work permits in San Marino:
- Certificate of nationality
- Birth certificate
- A police report from the applicant's home country
- Certificate of any pending charges
- Certificate of civil capacity
- Other application documents as required
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Minimum Wage
The minimum wage in San Marino as of 2023 is EUR 9.24 per hour or 1,501.49 per month. This wage has been set since 2007.
Payroll Cycle
The payroll cycle in San Marino is monthly.
Annual Bonus
There is no mandatory annual bonus given to the employees in San Marino.
Health Benefits
- The National health system of San Marino guarantees free medical care for all its residents. Contribution towards this is included in the social security contributions.
- Employers may also provide optional private health insurance.
- The following are included in health benefits -
- maternity benefits
- sickness
- diagnoses
- surgeries
Working Hours and Overtime
- Work hours: Employees work 48 hours a week and 8 hours per day.
- Break: There is no stipulated break time. However, at least a 30-minute lunch break is usually provided.
- Overtime: Employees receive 126.3% of their daily wage for overtime done during normal hours. For the overtime done at night, the compensation is 135% of their regular time.
Leaves
Sick Leaves
- Employees are paid 86% of their monthly income for the first 15 days of sick leave. Then 100% salary up to the 6th month and then 86% till the 12th month of the leave. Employees with permanent contracts get the benefits for 365 days and the employees with short-term contracts receive the benefits till their contract end.
- The leaves are paid by social insurance and medical benefit systems.
Parental leaves
- Maternity leave: Female employees are entitled to up to 5 months of maternity leave. 3 months to be taken before childbirth and 2 months after. Social Security usually pays for maternity leave.
- Paternity leave: There is no paternity leave in San Marino.
Annual leaves
- Annual leave is considered within 26 days of permitted leave for the employee.
Public Holidays (for the Calendar year 2023)
- New Year's Eve (1 January)
- Epiphany (6 January)
- Feast of Saint Agatha, co-patron saint of the Republic (5 February)
- Anniversary of the Arengo (25 March)
- Captains Regent Investiture (1 April)
- Easter Sunday (9 April)
- Easter Monday (10 April)
- Labor Day (1 May)
- Corpus Domini (8 June)
- Feast to celebrate the fall of totalitarianism (28 July)
- Assumption of Mary (15 August)
- Feast of San Marino, Patron and Founder of the Republic (3 September)
- Captains Regent Investiture (1 October)
- Feast of All Saints (1 November)
- Commemoration of the Dead (2 November)
- Feast of the Immaculate Conception (8 December)
- Christmas (25 December)
- Boxing Day (26 December)
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Taxes for Employers
Employers are required to pay the following taxes.
- Social services - 1%
- Fondiss (complimentary pension fund) - 2%
- Pension - 16.1%
- Social security - 4%
- Family benefits - 2.4%
- Unemployment due to layoff - 1.9%
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Taxes for Employees
Here is the breakdown of taxes paid by the employees in San Marino.
- Fondiss (complimentary pension fund) - 2%
- Pension - 5.4%
- Unemployment due to layoff - 0.5%
- Trade union - 0.4% (depending on the industry)
Income Tax
The following are the income tax brackets in San Marino.
- Up to EUR 10,000 - 9%
- EUR 10,001 - 18,000: 13%
- EUR 18,001 - 28,000: 17%
- EUR 28,001 - 38,000: 21%
- EUR 38,001 - 50,000: 25%
- EUR 50,001 - 65,000: 28%
- EUR 65,001 - 80,000: 31%
- EUR 80,001 and above: 35%
Probation
The probation period is mandated by an act for 6 months in San Marino.
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Termination
- A permanent employee can be terminated without any severance pay for any of the following just causes -
- Theft
- Contract violations
- Misconduct
- Redundancy
- In other cases, the employer is required to provide a written notice to the employee. The notice period should be as stipulated in the agreement or contract and is legally binding. In case the notice period is not observed, the employee is entitled to severance pay.
Severance Pay
The severance pay in San Marino only includes wages during the notice period, all applicable bonuses, and any other payments that may be applicable in the agreements.
Employees or Contractors
- Employees and contractors are treated as different entities in San Marino.
- Misclassification of the two would lead to serious penalties.
Final Words
With its proximity to other developed countries and the European Union, San Marino emerges as a lucrative business destination. EOR services help businesses with the complex and lesser-known norms of the country. These services take on employee payroll, taxes, benefits, etc. allowing businesses to focus on their goals.
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