# How to Preserve Seniority and TFR When Moving From an EOR to Your Own Italian Entity

> Moving staff from an EOR to your Italian entity? Use a balance transfer to keep seniority and TFR intact, and avoid a resign-and-rehire reset.

You hired in Italy through an Employer of Record. Now you have set up your own Italian entity and want your people on your payroll. The risk is simple. If you handle the move badly, employees lose their seniority and their TFR is paid out early. That costs them money and costs you trust.

The fix is a balance transfer. This article explains what it is and how to run it.

## What is at stake

Seniority drives several rights in Italy. It affects notice periods, some contract benefits, and protection on dismissal. It also affects how the national collective agreement (CCNL) treats the employee over time.

TFR is the severance amount that builds up during employment. The employer sets it aside. It is paid when the employment ends, or it goes to a pension fund if the employee chose that route.

If the EOR relationship ends and your entity hires the person fresh, both can reset. Seniority starts again. The EOR must settle TFR. The employee sees a break that was never needed.

## Two ways to move

**Resign and rehire.** The EOR contract ends. Your entity signs a new contract. This is simple on paper. It is also the option that breaks continuity. Seniority is lost unless you agree otherwise, and TFR is paid out at the end of the EOR contract.

**Transfer of the contract.** The employment continues without a break. The employee moves from the EOR to your entity as the same employment relationship. Seniority stays. The TFR already accrued moves with the employee. This is the balance transfer.

For most teams, the transfer is the better path.

## How the balance transfer works

The idea is that the accrued TFR does not get paid out and then rebuilt. Instead, the liability moves from the EOR to your entity. Your entity then continues to accrue TFR on top of the existing balance.

In practice you need these pieces:

- **A written agreement between all parties.** The EOR, your entity and the employee all sign. The employee must consent to the change of employer.
- **A clear statement of continuity.** The agreement says the employment continues and that seniority is recognised in full from the original start date.
- **A TFR statement from the EOR.** It shows the accrued balance at the transfer date, so both sides agree on the number.
- **A settlement of the money.** The EOR either transfers the funds to your entity or credits the amount against fees you owe. Your entity then carries the liability on its books. Agree this in writing before the move.

## What to check before the transfer

Several items sit outside TFR and seniority. Check them so nothing is lost or paid twice.

- **Accrued leave and permits.** Agree whether unused leave is carried over or paid out.
- **Probation.** The employee already served it. Do not apply a new probation period.
- **CCNL and job level.** Keep the same agreement and level, or one that is not worse. A downgrade invites disputes.
- **Pension fund choices.** If the employee directs TFR to a pension fund, the fund contributions must continue without a gap.
- **Benefits and allowances.** Match the package, or explain any change clearly.
- **Loans or advances.** If the employee drew an advance on TFR, record it and carry it across.

## Common mistakes

**Treating the move as a new hire.** Even a well-meant offer letter can reset seniority if it says nothing about continuity.

**Skipping the employee's consent.** A change of employer needs agreement. Do not assume it.

**Leaving the TFR number vague.** If the EOR and your entity disagree on the balance later, the employee is caught in the middle. Fix the figure in the signed documents.

**Starting too late.** The EOR contract has terms. Read the exit clauses early. Notice and handover steps take time, and your entity must be ready to run payroll from day one.

## A simple order of work

1. Confirm your entity can run payroll and is registered with the relevant authorities.
2. Ask the EOR for a TFR statement and a list of accrued entitlements for each employee.
3. Draft a single transfer agreement that all parties sign.
4. Agree how the TFR money moves, and when.
5. Brief each employee in plain language on what stays the same.
6. Start payroll in your entity on the transfer date, with no gap.

Have a local employment adviser review the documents. Rules and the exact treatment of each item depend on the CCNL and the facts of the case.

## The takeaway

A balance transfer keeps the employment continuous. Seniority stays. TFR stays with the person. You avoid a payout and a rebuild, and your team sees the move as a step forward, not a reset.

Find the country site for your market, or request a quote, and we will plan the move with you.

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Source: https://employitaly.com/articles/preserve-seniority-tfr-eor-to-entity-move.html · 2026-10-27