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Hiring in Malta

Hiring employees compliantly in Malta means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Malta so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Malta; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Need assistance hiring in Malta? Contact us about our International EOR Service

Labor Laws in Malta

Employee Probation Period

  • Probationary period is of six months, unless a shorter period is agreed upon between the employer and employee.

Annual Leave in Malta

  • Workers are entitled to paid annual leave of at least equivalent in hours of four weeks and four days on the basis of a 40-hour working week and 8-hour working day (24 days of annual leave).

Holidays in Malta

Workers are entitled to paid holidays during Festival (public and religious) holidays. These include memorial holidays and religious holidays (Christian origin).

Here is the full list of public holidays in Malta:

New Year’s Day 1st January
Feast of St. Paul's Shipwreck  10th February
Feast of St. Joseph `19th March
Freedom Day 31st March
Good Friday 10th April
Worker's Day  1st May
Sette Giugno 7th June
Feast of St. Peter and St. Paul 29th July
Feast of the Assumption  15th August
Feast of Our Lady of Victories  8th September
Independence Day 21st September
Feast of the Immaculate Conception 8th December
Republic Day 13th December
Christmas Day 25th December

 

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Maternity Leave Malta

  • Maternity leave is 126 consecutive days (18 weeks).
  • Of these 126 days, 42 days (6 weeks) is the compulsory entitlement and is taken after birth.

Paternity Leave Malta

  • Paternity leave is as follows: -
    • 1 day (birth leave)
    • 5 days (for public sector employees only)

Sick Leave in Malta

  • Employees are entitled to a maximum 156 days of sick leave per calendar year

Working Hours in Malta

  • The working week in Malta has 40 hours on the average
  • Daily office hours in the private sector are usually between 08:00 or 08:30 and 17:00 or 17:30.

Overtime in Malta

  • If your job or sector is not covered by a Wage Regulation Order (WRO), then the default overtime rate is 1.5 times your ordinary pay and will apply to any hours worked over 40 per week.
  • Overtime cannot exceed 48 hours per week

Termination of Employment in Malta

  • The employer may only terminate a contract of employment on the basis of:
    • a good and sufficient cause – a term which has no statutory definition and which constitutes the interpretational basis for each case of unfair dismissal brought before the Industrial Tribunal.
    • redundancy, or
    • the employee reaching retirement age.
  • Where an employer intends to terminate the employment of an employee on grounds of redundancy, he is required to terminate the employment of that person who was engaged last in the class of employment affected by such redundancy (“Last in First Out”),
  • The employee, on the other hand, is free to terminate employment of employment of an indefinite term without assigning any reason.

Notice Period in Malta

  • When terminating employment during a probationary period, a one-week notice applies if the length of service is longer than one month.
  • In case of indefinite contracts which extend beyond the probation period, notice has to be given prior to the termination of employment.
  • Notice is to be given either by the employee, or by the employer in cases of redundancy.
  • Notice is calculated on the employee’s continuous length of service, as follows:
    • Not more than one month - No notice
    • More than one month and up to six months - One week
    • More than six months and up to two years - Two weeks
    • More than two years and up to four years - Four weeks
    • More than four years and up to seven years - Eight weeks
    • More than seven years and up to eight years - Nine weeks
    • More than eight years and up to nine years - Ten weeks
    • More than nine years and up to ten years - Eleven weeks
    • More than ten years - Twelve weeks
    • For more than seven years, an additional 1 week for every subsequent year of service or part thereof up to a maximum of twelve weeks
    • For such longer periods as may be agreed by the employer and employee in the case of technical, administrative, executive or managerial posts

Severance in Malta

  • No severance payment is guaranteed by the law.
  • However, a collective agreement may provide for redundancy pay in the event of collective redundancies.

Malta Salary and Wages

Accurately estimate your costs when employing in Malta in 2023. Includes base salary, dependents, benefits, taxes, social contributions, and payroll costs. Monthly or yearly calculation period.

The calculator for Malta is coming soon, development in progress.

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13 / 14th Month Salary in Malta

  • Yes (Mandatory)
  • There is a statutory requirement to pay the 13th and the 14th month salary there are also two more bonuses.
  • The total bonuses required are four at approximately 135 Euros in June and December ; and approximately 121 Euros in March and September.

Income Tax in Malta

  • Malta taxes individuals who are both domiciled and ordinarily resident in Malta on their worldwide income.
  • Any person who is ordinarily resident in Malta but not domiciled in Malta is taxable only on income arising in Malta and on any foreign income remitted to Malta, i.e. on income and chargeable gains arising in Malta and on income outside Malta that is received in Malta.
  • Such persons are not taxable in Malta on income arising outside Malta, which is not received in Malta, and on capital gains arising outside Malta, regardless of whether they are received in Malta, or otherwise.
  • However, persons who are married to an individual ordinarily resident and domiciled in Malta, are subject to a worldwide basis of taxation (and not on a source and remittance basis).
  • A non-resident individual is taxed only on income and chargeable gains arising in Malta.
  • Income is taxable at graduated progressive rates, ranging from 0% to 35%.
  • Income tax rates for 2023 are given below: -

Married Resident Taxpayers

Taxable Income

Rate (%)

 

 

Deduct (EUR)

 

 

From

To

0

12,700

0

0

12,701

21,200

15

1,905

21,201

28,700

25

4,025

28,701

60,000

25

3,905

60,001

And above

35

9,905

Single Resident Taxpayers

Taxable Income

Rate (%)

 

 

Deduct (EUR)

 

 

From

To

0

9,100

0

0

9,101

14,500

15

1,365

14,501

19,500

25

2,815

19,501

60,000

25

2,725

60,001

And above

35

8,725

Parent Rates

Taxable Income

Rate (%)

Deduct (EUR)

From

To

0

10,500

0

0

10,501

15,800

15

1,575

15,801

21,200

25

3,155

21,201

60,000

25

3,050

60,001

And above

35

9,050

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Social Security in Malta

  • Social security is provided by a system of social insurance and a system of social assistance regulated by the Social Security Act.
  • All employees who pay a minimum amount of social security contributions are entitled to a basic pension on retirement.
  • For calendar year 2023, both the employer and the employee are each required to pay social security contributions at the rate of 10% of the individual employee’s salary and at fixed rates of EUR 51.60 per week for annual salaries exceeding EUR 26,831, provided the employee was born on or after 1 January 1962.
  • For self-occupied / self-employed individuals, social security contributions amount to 15% of the annual net income earned during the previous year.
  • The maximum contribution for persons born on or after 1 January 1962 amounts to EUR 77.40.

Employers

Employee

Self-Employed

10%

10%

15%

Immigration Malta

  • To take up employment in Malta, a foreign citizen must obtain either a work permit (which would cover a residence permit) or employment license.
  • Identity Malta Agency issues work and residence permits in Malta for both EU and non-EU nationals.
  • From 2019, employment license applications for “service providers” are handled directly by Jobsplus (one of the stakeholders of Identity Malta) while employment license applications for intracorporate transferees (ICTs) are handled directly by Identity Malta.
  • EEA and Swiss nationals and their third-country family members or dependents are required to apply for a work permit or an employment license to work in Malta.
  • For non-EU citizens, work permits are normally granted only to individuals who are able to provide skills or expertise not available in the local market.
  • Identity Malta issues a residence document on presentation of the residence application following the approval of the work permit or employment license (if the duration of the stay in Malta is longer than three months).
  • Applications for work permits are considered on a case-by-case basis.
  • Work permits are generally valid for one year and are renewable.
  • It takes approximately two to six months for a work permit to be issued and four to six weeks for an employment license to be issued.
  • In 2017, the Maltese government introduced a new scheme, known as the Key Employee Initiative (KEI) scheme, which processes work permit applications for non-EU nationals within five working days.
  • The application can be submitted while the applicant is still abroad.
  • The KEI scheme applies to employees who satisfy the following conditions:
  • They earn an annual gross salary of at least EUR30,000 per year.
  • They provide certified copies of their relevant qualifications, warrants (certificates provided to accountants in Malta) or documents showing the necessary work experience.
  • They provide a declaration by the employer stating that the applicant has the necessary credentials to perform the assigned duties.
  • Other documentation is required to complete the application.
Need assistance hiring in Malta? Contact us about our International EOR Service

Type of Visa/ Permit

Documentation

Validity

Eligibility

Work Permit

  • Application form
  • Curriculum vitae
  • Valid Passport
  • Visa
  • One passport photo
  • Copy of qualification certificates and accreditation/recognition
  • Evidence of search for EEA/Swiss/Maltese nationals through a detailed vacancy report.

1 year

  • EEA and Swiss nationals and their third-country family members or dependents are required to apply for a work permit or an employment license to work in Malta. 
  • For non-EU citizens, work permits are normally granted only to individuals who are able to provide skills or expertise not available in the local market. 

Key Employee Initiative (EU Blue Card)

  • CEA Form C (Non-EU)
  • Form ID 1A
  • Full copy of passport
  • CV
  • Work contract
  • Certified copies of relevant qualifications
  • Comprehensive health-insurance policy
  • Lease agreement or purchase agreement of property

1 year

  • High skilled employees
  • Employees who earn around EUR 30,000 per year
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Value Added Tax (VAT) in Malta

  • Whilst Malta follows the EU rules on VAT compliance, it is still free to set its own standard (upper) VAT rate.
  • The only proviso is that it is above 15%.
  • Suppliers of goods or services VAT registered in Maltese must charge the appropriate VAT rate, and collect the tax for onward payment to the Maltese tax authorities through a VAT filling.

Malta VAT Rates

Standard Rate

Group 1083

18%

Reduced Rate Group 1083 7%
Reduced Rate Group 1083 5%
Zero Rate Group 1083 0%

Mandatory Benefits in Malta

  • These are mandatory benefits as postulated by law
  • These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period, severance pay and 13th month pay
  • Mandatory benefits also include social security benefits.
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Mandatory Benefits overview

  • Probationary period

  • Public Holidays

  • Annual Leave

  • Sick Leave

  • Maternity Leave

  • Paternity Leave

  • Notice period

  • Social Security Benefits

Payments And Invoicing

  • The year of assessment (tax year) is the calendar year.
  • In the year of assessment, income tax is charged on income earned in the preceding calendar year (the basis year).
  • Recipients of specified types of income are not required to file regular tax returns, but they receive a tax statement with respect to the basis year in question.
  • The taxpayer needs to review the tax statement.
  • If the taxpayer does not agree with the amount, a form attached to the tax statement must be completed and sent to the Commissioner for Revenue.
  • Subsequently, the taxpayer may be asked to file a special tax return by 30 June of the year following the basis year.
  • All other individuals must file a self-assessment tax return and pay all tax due by 30 June of the year following the basis year
  • Tax liability for employees is paid through the Final Settlement System (FSS) of withholding on salaries and wages.

Payroll Accrual in Malta

Country Accruals Additional Information

Social security 10.00%
Maternity 13weeks
Vacations 11.23%
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Description

10% calculated on gross salary

Payroll Accruals Additional Information

    Employment Accruals
Annual Leave Workers are entitled to paid annual leave of at least equivalent in hours of four weeks and four days on the basis of a 40-hour working week and 8-hour working day (24 days of annual leave). This equals 6.57% (24/365 days) of annual income
Maternity Leave Maternity leave is 126 consecutive days (18 weeks). This equals 34.6% (18/52 weeks) of annual income
Paternity Leave Fathers are entitled to 10 days of paternity leave This equals 2.74% (10/365 days) of annual income
Sick Leave Employees are entitled to 15 days’ sick leave on full pay and an additional 36 days’ sick leave on half pay calculated in hours less sickness benefit in every calendar year.
The first 3 days of any claim for sick leave shall be paid by the employer.
This equals 0.82% (3/365 days) of annual income
Overtime If your job or sector is not covered by a Wage Regulation Order (WRO), then the default overtime rate is 1.5 times your ordinary pay and will apply to any hours worked over 40 per week.
Overtime cannot exceed 48 hours per week
Normal hourly wage is around 28 EUR. Overtime is paid at an additional 14 EUR.
Social Security Employers must make the following social security contributions: - -> 10% of the basic wage paid to their employees
-> Subject to a minimum amount of EUR 17.58 and a maximum amount of EUR 35.7 for persons born up to 31 December 1961 or EUR46.53 for persons born from 1 January 1962 onward, per week per employee.
This equals 10% of annual income

Accrued Benefits in Malta

Christmas Bonus %

Based on € 135.10 in December 0.72%

0.72%
Christmas Bonus Over Vacations % 0%
Severance per Year%

No statutory requirement

 
Vacations %

Employees are entitled to 24 days of paid annual leave (6.59% of annual salary)

6.59%
Of annual
salary
Notice %

Employees are entitled to 2 weeks of notice after one year of service (2.74% of annual salary)

2.74%
Christmas Bonus Over Notifications % 0%
Vacations Plus %

Based on € 135.10 in June 0.72%

0.72%

Total percentage of Salary (yearly)

The total employment accruals as a percentage of salary per annum

10.77%

Why use Global Expansion to hire in Malta

Establishing a branch office or subsidiary in Malta can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Malta labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Malta law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Malta. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Malta Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.

 

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