Country Guides

Malta

Quick Find

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Capital

Valletta

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Language

Maltese/ English

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Remote workers

25,000 - 30,000

payments

Currency

€ Euro (EUR)

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Working hours

40 hours per week

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Public holidays

14 per year

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Minimum weekly salary

€229.44

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Tax year

Jan 1 - Dec 31

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Date format

DD/MM/YYYY

Misclassification penalties

Misclassifying employees as independent contractors may result in fines, back payment of social security contributions, unpaid taxes, employee benefits, and possible legal claims from the worker.

Fun fact

Malta is one of the smallest countries in Europe but has three UNESCO World Heritage Sites, including the historic capital city of Valletta.

Employer contributions

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    Employer tax: 10.30%
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    Social security contributions: 10.30%, which includes maternity contribution and social insurance capped at €55.93 per week

Social security contributions: Social insurance

Contribution amount: 10%

Social security contributions: Maternity contribution

Contribution amount: 0.30%

Employee contributions

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    Social security: 10% capped at €6.62 (approx., depending on employee category)

Income tax

Gross income: €0 – €12,000

Tax rate: 0%

Gross income: €12,001 - €16,000

Tax rate: 15%

Gross income: €16,001 - €60,000

Tax rate: 25%

Gross income: €60,001 - and over

Tax rate: 35%

Statutory benefits in Malta

  • Public health insurance

    In Malta, public healthcare is free for residents who contribute to social security. Others can pay for treatment or opt for private health insurance. There is no mandatory public health insurance for everyone.

  • Social Security

    Malta's social security provides pensions, healthcare, and other benefits to those who contribute. There's also basic assistance for low-income residents who haven't contributed enough

Non-mandatory benefits in Malta

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    Private Health Insurance
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    Flexible working hours
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    Remote or hybrid work
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    Training and development budgets
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    Performance bonuses
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    Extra paid leave
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    Wellness benefits - gym membership or wellness allowance
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    Relocation packages
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    Stock options/ Equity plan
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    Home office allowance
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Written employment contract

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Work flexibility

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Union membership

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Whistleblower protection

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Protection from discrimination

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Protection from harassment

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Data protection

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Pregnancy rights

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Paid annual leave

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Dismissal protection

Paid time off

24 days of paid vacation leave + 14 days of public holidays

Sick leave

10 working days of paid sick leave per year. A medical certificate is required.

Maternity leave

18 weeks, 4 weeks must be taken before the child's birth

Paternity leave

10 paid days of paternity leave that must be used within the first 15 days following childbirth

Parental leave

4 months until the child reaches the age of 8

Probation

The standard probation period is 6 months, and may be extended up to 12 months for technical, managerial, administrative, or executive roles if agreed in the employment contract.

Payment frequency

Wages should be paid at regular intervals not exceeding 4 weeks in arrears. Different pay periods can be agreed through a collective agreement. If the employer fails to pay the employee wages due, the employee can lodge a complaint at the Department of Industrial and Employment Relations.

Payday

Salaries are usually paid between the 25th and the 30th of the month.

Termination is regulated by the EIRA and overseen by the Department of Industrial and Employment Relations (DIER). DIER ensures procedures are fair and lawful and checks that employees receive the proper notice, wages and leave entitlements while providing assistance to both employers and employees on their rights and obligations.

FAQs

There are 4 ways of employing people in Malta. Here is an overview of each way to employ a worker outlining the potential cons.

1.HQ country employment & payroll

What is it? While the person is in Malta, they are employed and payrolled directly by the company’s HQ entity.

Cons: May create tax and permanent establishment risks in Malta. The company may also be required to register for payroll taxes and social security locally if the employee works there long-term.

2.Independent contractor

What is it? The worker operates as a self-employed person or through their own company and invoices for services.

Cons: Risk of employee misclassification if the contractor works like a full-time employee. This may lead to back taxes, social security contributions, penalties, and employee benefit claims.

3.Direct local employer set up

What is it? The company establish a local legal entity in Malta and hires employees directly.

Cons: High set-up and administrative costs, ongoing compliance obligations, and the need to manage local payroll, tax filings, and employment regulations.

4.Employer of Record (EOR)

What is it? A third-party provider legally employs the worker in Malta and manages payroll, taxes and compliance on behalf of the company.

Cons: Service fees may be higher than direct employment if the company grows a large team locally. Employees will need clarification about the employment structure.

Generally, the process of registering a company in Malta can take anywhere from a few days to a few weeks, depending on the complexity of the company structure and the completeness of the application.

However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, and changes of rules and regulations followed.

While many employers practice employing remote workers as independent contractors, it’s a bad practice. If an individual is giving their full and undivided attention to your company in Malta, treating them as an independent contractor is likely a breach of Maltese employment laws and those in your country.

Your company could be liable for fines on owed holiday pay, sick pay, social welfare payments, paternity benefits, maternity benefits, or other legal measures. Since the individuals you are working with do not receive the benefits of local employment laws and protections that are often afforded to people working full-time hours. Read more on why hiring remote people as independent contractors is a bad idea.

When you hire employees in Malta, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices.

Complying with local employment law in Malta is fundamental for the correct running of your business – not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but also to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, and working hours regulations.

As with every other country, there are certain costs associated with employing a worker in Malta that come on top of the gross salary you are offering.

To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.

It means that Boundless is the legal employer of the individual, as far as the Maltese government, tax, and employment authorities are concerned.

We are responsible for:

* informing you about any pre-employment requirements
* ensuring employment is compliant with Maltese employment law
* informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits
* providing a locally compliant employment contract
* processing local payroll
* filing employment-related tax returns
* issuing payslips to the employee
* distributing salary payments
* payments to the local tax authorities

Customers that work with an Employer of Record in Malta are responsible for:

* sourcing and recruiting their own workers
* managing the employee’s day-to-day workload
* contributing to the personal/professional development of the employee through their work
* following any guidance we give on employment and HR best practices or legal obligations in Malta, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and many others
* ensuring that payroll bills relating to their team are paid to Boundless before the cut-off point in each pay cycle

Boundless as the Employer of Record files all pertinent taxes and social security contributions as they relate to the compliant employment of an individual in their home country.

We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Malta. They ensure the Maltese employment contracts and any other relevant documents required for new employees comply with the local jurisdiction.

We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice periods or work-from-home regulations. Whenever a potentially sensitive issue arises in Malta, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.

The company remains responsible and informs employees of the day-to-day management of the people and teams employed through Boundless, including any disciplinary or performance issues. Boundless ensures compliance with Malta-specific procedures, practices, and labour laws while employing people and teams on behalf of the company.

Any new employee who is locally employed through an Employer of Record gets full employment rights and benefits as specified in Maltese employment law. They get a locally compliant employment contract, statutory parental leave, annual leave, benefits, any relevant tax credits, and more.

In Malta, both employers and employees are required to make social security contributions. Employers contribute 10% of the employee’s basic weekly wage, subject to a maximum weekly cap (approximately €55.93 for employees born in 1962 or later). Employees also contribute 10% of their weekly wage, up to the same cap. In addition, employers pay a 0.3% maternity fund contribution. Employees are also subject to progressive income tax, which ranges from 0% to 35% depending on income and tax status.

To get a clear overview of both employee and employer taxes, use our salary breakdown calculator to submit any additional data needed and get a downloadable PDF via email.

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