San Marino, one of the world’s oldest republics and a landlocked enclave within Italy, offers a unique opportunity for companies seeking to expand into Europe without the regulatory intensity of larger EU markets. With a stable economy, low corporate taxes, and a pro-business environment, San Marino provides a strategic location for European operations, particularly for companies in finance and tech.

However, San Marino’s labor market is highly regulated. Employment relationships are governed by detailed collective labor agreements, and foreign employers must comply with local hiring laws, social security contributions, and residency restrictions. 

This guide outlines how an Employer of Record (EOR) can streamline the hiring process and help you remain compliant with San Marino’s employment and tax regulations.

How to Hire Employees in San Marino

There are three main ways to hire in San Marino:

Setting Up a Local Entity

Establishing a company in San Marino requires registration with the San Marino Chamber of Commerce, opening a local bank account, and securing relevant operating licenses. Employers must also register with the Social Security Institute (ISS) and the Labor Office. This option is best for businesses looking to establish a long-term physical presence, but the setup can be complex and costly.

Working with an Employer of Record (EOR)

An EOR serves as the legal employer of your staff in San Marino, handling employment contracts, payroll, tax compliance, and mandatory social contributions. This model enables you to hire quickly and compliantly, without needing to incorporate. For companies testing the market or operating small teams, the EOR route offers simplicity and speed.

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Hiring Independent Contractors

Hiring freelancers or contractors is allowed in San Marino, but the law distinguishes sharply between employees and self-employed workers. Misclassification can trigger legal consequences, including fines and retroactive tax liabilities. For roles that involve consistent working hours, supervision, or benefits, using an EOR is often safer.

San Marino EOR vs Legal Entity in San Marino

Foreign companies looking to hire in San Marino have two main options: incorporate locally or partner with an Employer of Record (EOR). While incorporating gives full operational control, it also brings significant regulatory and financial obligations.

To set up a local entity, businesses must register with the San Marino Chamber of Commerce and obtain the necessary trade licenses. They must also register with the Tax Office and the Social Security Institute (ISS). The full cost of incorporation, including legal support, permits, and government fees,  ranges from EUR 5,000 to 10,000. Annual maintenance, including local accounting, labor filings, and audits, may cost an additional EUR 2,000 to 3,000 per year.

By contrast, working with an EOR eliminates the need for entity setup. The EOR becomes the legal employer on your behalf. This makes the EOR model ideal for companies that want to avoid complex bureaucracy or quickly onboard talent without long-term infrastructure commitments.

If you’re looking to scale fast, reduce compliance risks, or test the San Marino market, the EOR path is the most efficient way to hire legally and cost-effectively.

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Let us handle the complexities of hiring, compliance, and payroll in San Marino while you focus on growing your team.

  • Hire employees in San Marino with a San Marino EOR
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Using an Employer of Record in San Marino

As the legal employer on behalf of your company, your EOR is in charge of:

  • Drafting compliant employment contracts: Ensures contracts align with Sammarinese labor standards, covering wages, working hours, leave entitlements, and termination clauses in line with Law No. 131 of 2005.
  • Registering employees with relevant authorities: Handles all necessary employee registrations with local bodies, including the Social Security Institute (ISS) for pension, healthcare, and welfare contributions, and the Tax Office for income tax purposes.
  • Calculating and remitting payroll taxes: Manages statutory deductions from employee pay, including progressive income tax (IRPEF), social security contributions, and mandatory withholdings for benefits and insurance.
  • Managing payslips, benefits, and bonuses: Delivers accurate payslips on time while overseeing both mandatory and optional benefits according to San Marino’s employment norms.
  • Ensuring compliance with labor and immigration rules: Oversees work permit applications and renewals for foreign nationals and ensures your employment practices remain compliant with both labor and immigration regulations.
  • Handling employee exits: Coordinates resignations, dismissals, and end-of-contract procedures, ensuring final payments, unused leave payouts, and required notice periods are executed lawfully.

With an EOR, you retain full control over your team’s daily operations, while the provider assumes all legal employer responsibilities.

How Much Does a San Marino EOR Cost?

Employment and Labor Laws in San Marino

San Marino offers a highly regulated but stable labor environment. Employment relationships are governed by national labor laws, collective agreements (when applicable), and oversight by the Labor Office and the ISS.

Key Contract Requirements

Written employment contracts are strongly recommended. Standard contract clauses include:

  • Job title and scope of duties
  • Base salary and payment frequency (usually in EUR)
  • Workplace location
  • Probation terms and notice period
  • Working hours, rest days, and holiday entitlements

Working Hours

A standard full-time workweek in San Marino is 40 hours, typically distributed over five 8-hour days. Slight adjustments may occur in sectors like hospitality or manufacturing.

Overtime

Overtime must be paid for hours exceeding the standard 40 per week. The usual rate is 1.5x the regular hourly wage. Work performed on Sundays or public holidays may attract double pay, depending on the employment contract or collective agreement.

Probation Periods

Probation is not mandatory under San Marino law, but employers often include it in contracts. The duration commonly ranges from 1 to 6 months, during which notice periods may be shorter and performance evaluations are carried out.

Payroll and Employment Taxes in San Marino

Here’s what to expect when managing payroll in San Marino:

Payroll Cycle

Wages are typically paid monthly. Payslips must be issued to employees, itemizing gross earnings, tax and social security deductions, and net pay.

Minimum Wage

San Marino does not have a single national minimum wage law. Instead, pay is set by collective bargaining agreements (CBAs) that vary by industry.
While there is no universal law, these agreements are legally binding for all employers in each sector. As of 2026, the lowest established rate for full-time work is approximately €1,728.38 per month (roughly €10.64 per hour). This system ensures that wages stay competitive and meet the country’s high cost of living.

Bonus Payments

There is no legal requirement for a 13th-month salary. However, performance-based bonuses or end-of-year incentives are common in sectors like finance, retail, and manufacturing.

Employer Tax Contributions

Below is a summary of some of the contributions employers in San Marino are obligated to make:

Contribution TypeRate
ISS~17%
Family Allowance Fund~4.7%
Other Employer Charges~1%
Total Estimated Employer Contributions~22.7%

The exact rates may vary slightly by sector or type of contract, and all contributions are made to the ISS.

Employee Payroll Contributions

Employees are not without contributions of their own. Contributions are withheld by the employer at source and remitted monthly to the ISS.

Contribution TypeRate
ISS~9%
Other Employee Contributions~0.5%
Total Estimated Employee Contributions~9.5%

Income Tax

Employers must withhold these taxes monthly and remit them to the San Marino Tax Office.

Income BracketsTax Rate
Up to €10,000.009%
From €10,000.01 to €18,000.0013%
From €18,000.01 to €28,000.0017%
From €28,000.01 to €38,000.0021%
From €38,000.01 to €50,000.0025%
From €50,000.01 to €65,000.0028%
From €65,000.01 to €80,000.0031%
Over €80,000.0035%

Pension System

The social insurance system managed by the ISS covers pensions, maternity, disability, unemployment, and healthcare. Participation is mandatory for all employees and their employers.

Tax Compliance and Payroll Reporting

Employers must register with both the San Marino Tax Office and the ISS. They are required to maintain accurate payroll records and file monthly reports. Non-compliance can result in penalties, including fines and back payments.

Work Permits and Visas in San Marino

Hiring foreign nationals in San Marino involves securing the appropriate residence and work permits through the Labour Office and the Immigration Police (Gendarmerie). All foreign workers must obtain a residence permit with the right to work, issued only if sponsored by a registered San Marino employer.

Below are the key categories of work authorization:

General Work Permit

This is the most common type of authorization granted to foreign employees. It allows the holder to live and work in San Marino for an initial period of 12 months, renewable annually. Employers must demonstrate that the position could not be filled by a local or EU citizen. Applications require a valid job offer, proof of accommodation, and health insurance.

Specialized Skilled Worker Permit

This permit is aimed at professionals in critical sectors such as finance, IT, engineering, and healthcare. It allows for streamlined processing and longer validity, with extensions subject to review. Candidates typically require recognized qualifications and a detailed job description aligned with national development goals.

Intra-Company Transfer Permit

Multinational companies relocating staff to San Marino can apply for an intra-company transfer permit. The employee must have been employed by the parent company for at least 6 months and must be transferring into a managerial, executive, or specialist role. Permit durations vary based on the project length and are renewable.

Foreign employees must hold a Permesso di Soggiorno (Residence Permit) before commencing work. Employers are responsible for coordinating the application process with San Marino’s immigration and labor authorities. Non-compliance can lead to fines, invalid contracts, or suspension of employment privileges.

Time Off and Leave in San Marino

Largely influenced by Italian standards, San Marino labor laws set forth employee leave entitlements across vacation, public holidays, and other forms of statutory leave. Employers may offer additional benefits through collective agreements or individual contracts.

Mandatory Leave Entitlements

Employees are entitled to at least 20 working days of paid annual leave after 12 months of continuous employment. Leave accrues monthly and must be used within the year unless otherwise agreed upon.

Public Holidays

San Marino observes 14 national public holidays, which may include both religious and historical observances. If a holiday falls on a weekend, no substitute day is granted unless specified in the contract or collective agreement.

  • New Year’s Day (January 1)
  • Epiphany (January 6)
  • Feast of Saint Agatha (February 5)
  • Anniversary of the Arengo (March 25)
  • Easter Monday (Variable – March/April)
  • Labor Day (May 1)
  • Corpus Christi (Variable – May/June)
  • Anniversary of the Fall of Fascism (July 28)
  • Assumption Day (August 15)
  • San Marino National Day (September 3)
  • All Saints’ Day (November 1)
  • Immaculate Conception (December 8)
  • Christmas Day (December 25)
  • St. Stephen’s Day (December 26)

Sick Leave

Employees are entitled to paid sick leave, with compensation provided through the ISS. A medical certificate must be submitted within 3 days of illness onset. Duration and coverage percentages vary depending on seniority and contract type.

Maternity Leave

Female employees are entitled to 18 weeks of maternity leave, generally taken 8 weeks before and 10 weeks after delivery. 

Paternity Leave

Fathers are entitled to 10 days of paid paternity leave, which must be taken within five months of the child’s birth. 

Parental Leave

In addition to maternity and paternity leave, parents may access individual parental leave of up to 6 months (per parent) until the child turns 12. This leave is usually unpaid.

Bereavement and Jury Duty

Employees are generally entitled to 3 to 5 days of paid bereavement leave, depending on the relationship to the deceased. 

Employee Benefits in San Marino

Employers in San Marino must comply with statutory labor provisions and are expected to offer a baseline of social protections, alongside additional perks to stay competitive, particularly when hiring skilled professionals or foreign talent. Key statutory and customary employee benefits include:

  • Paid annual leave
  • Sick leave 
  • Public holidays
  • Maternity and paternity leave
  • Unemployment benefits 
  • Pension and disability insurance 
  • Healthcare 

Additional or discretionary benefits often provided by employers include:

  • Performance-based bonuses or 13th-month salary
  • Transportation subsidies or parking privileges
  • Meal vouchers or daily lunch allowance
  • Private supplementary health or dental coverage
  • Company-provided mobile phones, laptops, or equipment
  • Flexible work arrangements or remote work stipends

Any fringe benefits should be reported and disclosed clearly in employment contracts, as some may be subject to income tax or social security contributions.

Terminations and Severance in San Marino

Employment relationships in San Marino are governed by collective labor agreements, the San Marino Labor Code, and individual employment contracts. Employers must adhere to fair dismissal practices and procedural safeguards.

Ending an Employment Contract

Employment may be terminated based on:

  • Employee resignation
  • Expiry of a fixed-term contract
  • Mutual agreement between the parties
  • Dismissal with just cause
  • Redundancy or economic restructuring

Grounds for lawful dismissal include:

  • Repeated unexcused absences or lateness
  • Poor performance following prior written warnings
  • Insubordination or misconduct
  • Harassment, theft, or violence in the workplace
  • Criminal conviction affecting job performance
  • Loss of work authorization for foreign employees

Employers are obligated to follow due process, including prior warnings, documentation of infractions, and an opportunity for employee representation.

Notice Periods

The required notice period depends on the employee’s job category and years of service, as outlined in national collective bargaining agreements:

Employee TenureMinimum Notice Period
Less than 5 years15 days to 1 month (by role)
5–10 years1 to 2 months
10+ years2 to 3 months
Managerial positions3 months or more

Severance Pay

Severance entitlements vary depending on the cause of termination.

For just causes like misconduct, no severance is payable.

For causes like redundancy or economic dismissal, employees may receive an indemnity equal to a portion of their monthly salary multiplied by years of service (usually 1 month per year) worked, often capped by sector-specific CBAs.

Severance terms should be specified in the employment contract and are usually governed by collective labor agreements relevant to the employee’s industry.

Expand into San Marino Easily with Remote People’s Employer of Record (EOR) Solution

Hiring in San Marino doesn’t require you to navigate the complexities of legal incorporation or immigration procedures on your own. With Remote People’s EOR platform, you can employ local or expatriate talent within 72 hours without setting up a legal entity.

From handling visa coordination for expat hires to ensuring lawful termination protocols, our team ensures seamless compliance with San Marino’s labor requirements. At Remote People, we provide the infrastructure to hire quickly, compliantly, and cost-effectively.

Start hiring in San Marino today from just $199/month per employee.