Hire Employees in San Marino

Two routes exist. Registering a San Marino entity gives you direct employment, followed by enrolment with the Istituto per la Sicurezza Sociale.

An Employer of Record removes that setup. The EOR is the legal employer, runs payroll, withholds IGR as sostituto d’imposta and remits contributions, while day-to-day direction stays with you.

ISS registration is mandatory and provides full cover of social and pension risks, there is no opt-out or private substitute.

San Marino combines relatively heavy social contributions with a competitive corporate regime. Combined ISS contributions run 30% to 35% of gross salary between employer and employee, while corporate IGR sits at a flat 17%.

New businesses get a substantial concession. Innovative startups and new enterprises can access an IGR rate reduced to 5% for the first five financial years, along with reductions in social security contributions and exemptions or reductions on licence taxes. The relief is reserved for authentically new projects, not for reorganisations of pre-existing activity.

Further incentives target technology, digitalisation, the green economy and renewable energy.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a San Marino entity somewhere between 10 and 18 employees. Model both, see EOR vs Entity for the framework.

Employer and employee both pay mandatory contributions to the Istituto per la Sicurezza Sociale. The combined rate runs 30% to 35% of gross salary, split between the two parties.

The contribution comprises several components: IVS covering old age, invalidity and survivors, sickness insurance, and the health fund. Together they cover pensions, healthcare, accidents and social benefits.

The precise employer and employee split was not reproduced in the sources consulted. The combined band is well documented; the division between the parties should be confirmed with the ISS before quoting a specific employer cost.

Registration with the ISS is mandatory and guarantees full cover of social risks. The system is publicly controlled and regarded as soundly managed.

Mandatory social contributions are deductible when computing the employee’s IGR base.

Gross monthly salaries in euros. Combined contributions of 30% to 35% apply across both parties.

Benchmarks below are gross monthly salaries in euros. Combined social contributions run 30% to 35% of gross, with the employer bearing the larger share.

Income tax was reformed by Legge 141/25, with the changes taking effect in 2026.

The IGR is progressive by income band, working much as the Italian IRPEF does but with entirely different thresholds. Rates run from 9% on the lowest incomes to 35% above €100,000.

There are no additional regional or municipal taxes, which makes the burden more predictable and often lighter than elsewhere in Europe.

The SMAC card changed function in the reform. Until 2025 it was a deductible expense reducing the taxable base; from 2026 it operates as a tax credit, cutting the tax payable instead. The San Marino Card is a prepaid discount card promoted by the Secretariat of State for Finance.

Tax is computed on total gross income net of deductions and allowances for documented medical expenses, mandatory social contributions, family responsibilities and rent on a principal residence. The employer withholds monthly as sostituto d’imposta.

Note separately that for tax years to 2030, proportional IGR on certain income under Legge 166/2013 is charged at 18% rather than 17%, with the additional revenue directed to infrastructure and debt reduction.

Progressive IGR bands as reformed by Legge 141/25 for 2026. No regional or municipal surcharges apply.

Employment terms are largely set by collective agreement rather than a single statutory minimum wage.

The standard working week is 40 hours.

Tax residence turns on objective criteria, registered residence or habitual domicile for at least 183 days a year, or the predominance of economic and family interests in the territory. Residents are taxed on worldwide income; non-residents only on San Marino-source income.

The employer acts as withholding agent throughout, so classification of residence directly affects payroll treatment.

Contracts should record pay, hours, leave, notice and termination terms, and reflect the applicable collective agreement.

Register the employee with the ISS before the first payroll run, enrolment is mandatory.

Establish residence status early, since it determines whether worldwide or source-only taxation applies.

The standard working week is 40 hours, with terms otherwise set by collective agreement.

Because contributions apply across the whole of gross, overtime and bonuses carry the same combined 30% to 35% charge.

Mandatory contributions reduce the employee’s IGR base, so the effective tax on additional earnings is lower than the headline band suggests.

San Marino observes Catholic and national public holidays, including the Anniversary of the Arengo in March, the Fall of Fascism in July and the Feast of Saint Marinus in September.

San Marino observes Catholic and national public holidays, including the Anniversary of the Arengo in March and the Feast of Saint Marinus in September. Dates and any substitution rules are set out below.

The ISS administers pensions, healthcare and social benefits, funded by the combined contribution.

Pensions paid by the ISS are taxable income for residents and fall under the ordinary IGR regime at the same progressive rates as other income. The ISS itself acts as sostituto d’imposta, withholding IGR monthly from the gross pension.

The contribution covers old age, invalidity and survivors through IVS, alongside sickness insurance and the health fund.

San Marino levies no annual property taxes, there is no equivalent of the Italian IMU, which affects the total cost of living for relocating staff.

Termination follows San Marino employment law and the applicable collective agreement.

Final pay including accrued leave is due on separation and must be reflected in the month’s IGR withholding and ISS remittance.

Because contributions run at 30% to 35% combined with no ceiling in evidence, a final settlement carries the full charge.

Deregistration with the ISS is an employer obligation on exit.

Frontier worker taxation changed materially and it is the single most important point on this page for anyone hiring across the Italian border.

The new double taxation agreement between San Marino and Italy took effect on 1 July 2023. A frontier worker is defined as someone resident in an Italian municipality within 20 km of the San Marino border who works stably in the Republic. An Italian exemption of €10,000 applies to employment income earned in San Marino, alongside a credit for tax paid abroad.

The 2025 IGR reform reduced the deductions available to frontier workers. Combined with the recalibration of the foreign tax credit, that has significantly increased the overall burden. The Associazione Frontalieri Italia San Marino estimates the total increase in tax at between 7% and 200%, depending on income level and which Italian deductions the taxpayer benefits from.

One worked case shows effective double taxation of €1,154, a 25% increase on the tax already paid in San Marino. Italian residents must also pay regional and municipal surcharges on the Italian taxable base.

Anyone quoting net pay to a frontier worker should model the Italian side explicitly rather than assuming the San Marino withholding settles the position.

Using pre-2026 tax treatment is now wrong. Legge 141/25 reformed the IGR with effect from 2026, including converting the SMAC card from a deduction against income into a credit against tax.

The frontier worker impact is easy to underestimate. Estimates put the increase in overall tax at 7% to 200% depending on income and Italian deductions, with double taxation arising in some cases.

The employer and employee split of contributions is not well published. The combined 30% to 35% band is documented; confirm the division with the ISS before committing to an employer cost.

Note also that startup incentives apply only to authentically new projects rather than reorganisations; and that certain proportional IGR is charged at 18% rather than 17% for years to 2030.

Work backwards from the start date. An EOR hire takes two to four weeks; entity formation runs two to four months.

Confirm the contribution split with the ISS before quoting, since only the combined band is well documented.

Model the post-Legge 141/25 position, treat the SMAC card as a tax credit rather than a deduction, and for any frontier worker model the Italian side explicitly.