Hire and pay employees in Malta quickly and compliantly

Complying with labor and employment laws in Malta

Malta’s labor framework merges EU directives with local legislation, chiefly the Employment and Industrial Relations Act (EIRA), Cap. 452.

No matter what kind of business you plan to bring to Malta, abiding by local rules, customs, and laws fosters trust among employees and spares you from fines by the Department of Industrial and Employment Relations (DIER).

Malta’s labor and employment laws can be complex, particularly for employers hiring there for the first time. If you’re looking to hire in Malta, simplify your compliance work by partnering with Rippling EOR, which can offer expert HR support on local employment regulations so your business is always up to date on the latest laws—in Malta and beyond.

Employment contracts in Malta

In Malta, if the period of employment lasts more than one month and the employee works more than eight hours per week, the employer is required to provide one of the following:

• A written employment contract
• A written statement of minimum employment conditions

Whichever one the employer chooses to provide, the employee must receive it within seven calendar days of their start date.

Employment agreements can be indefinite or fixed-term and written in one of the two official languages, Maltese or English. They must include:

• Basic information, like the employee, employer, and place of work
• Job description, including a clear explanation of the employee’s role
• Employee’s start date (and end date, if it’s a fixed-term contract)
• Probation and training details
• Leave entitlements, including different types of paid leave the employee will receive
• Termination procedures, including details on how employment may be terminated, notice periods, and methods
• Employee’s pay, including payment frequency and overtime details
• Working time, including hours the employee will be expected to work and any variability or unpredictability the employer anticipates in their work patterns
• Collective agreements that apply to the employee
• Social security details

Labor unions in Malta

Malta has one of the highest unionization rates in the EU, with more than half of all workers belonging to a trade union. Some of the common organizations representing employees in various sectors include the General Workers’ Union (GWU) or Union Ħaddiema Magħqudin (UĦM). They negotiate collective agreements, set pay scales above the legal minimum, and handle dispute resolutions.

Some key things employers should know related to union dynamics:

• Collective bargaining is common in a country with high union membership rates. Sectors like manufacturing, public service, or tourism might have robust CBAs that surpass EIRA’s basic terms.
• Strikes and other industrial actions are allowed under Maltese law if negotiations fail, but they’re usually regulated.
• Union membership is voluntary, but many employees join for better working conditions.

Mitigating permanent establishment risk in Malta

A permanent establishment (PE) is a legal and tax concept that refers to a fixed location, such as an office, factory, or branch, where a business regularly conducts its activities in a foreign country. If a company establishes PE in another country, whether intentionally or not, it generally means the business has to pay corporate income taxes on the revenue it earns there.

Foreign companies with ongoing business in Malta risk triggering PE and paying the country’s steep 35% local corporate tax (though effective rates can drop via tax credits) to the Commissioner for Revenue. 

The term “permanent establishment” isn’t specifically defined in Maltese tax law. In general, companies incorporated in Malta are considered residents there. Companies incorporated in other jurisdictions are considered residents in Malta when the business exercises management and control there. In the absence of a double-taxation treaty, non-residents are responsible for paying Maltese tax on income they earn in Malta.

Businesses expanding to, doing business in, or hiring in Malta can mitigate their PE risk by:

• Keeping employees in supportive, not decisive, roles
• Concluding major sales or signings outside Malta
• Documenting local staff’s job scope, ensuring there’s no contract sign-off authority in Malta
• Consulting local tax advisors if they're uncertain about their risk of inadvertently forming a PE in Malta

Probationary period in Malta

While the EIRA acknowledges probation, it’s not heavily detailed. Still, the Maltese government has rules that are outlined on its website.

Probation periods for employees on indefinite contracts should last six months, unless the employer and employee agree upon a shorter period. If the employee holds a technical, executive, administrative, or managerial role and their wages are at least double the minimum wage, their probation period should be one year, unless otherwise specified in the contract of service or the collective agreement. Employers may not extend probationary periods.

For employees with fixed-term contracts, the length of the probation period depends on the length of the work engagement:

Local laws in Malta

Beyond the EIRA, compliance with local laws means navigating data regulations, health and safety mandates, and the push-pull between federal and sectoral labor and employment laws. Observing these broader laws cements your brand’s reliability in a country that combines heritage with modern enterprise.

Here are some key areas of Maltese law relevant to foreign employers:

• GDPR: As a member of the European Union, Malta enforces strict data privacy. Employers must handle employee data with consent and security.
• Occupational Health & Safety: The OHSA Act mandates safe workplaces, especially relevant in manufacturing or maritime.
• Sectoral laws: In addition to national laws, Malta has a number of sectoral labor laws that define minimum wages, working hour rules, and other statutes by industry.

Complying with these laws is as vital as following the EIRA. They ensure you fulfill broader EU and Maltese standards, letting you focus on building a positive workplace near the scenic harbors and limestone buildings that make Malta so unique.

Worker classification and misclassification in Malta: Contractors vs. employees

In Malta, the line between “employee” and “independent contractor” is shaped by the EIRA (specifically, a 2012 amendment called the Employment Status National Standard Order). If a person is integrated into your business—working set hours, under your direct control, and using your equipment—they may be an employee, not an independent contractor.

Misclassifying employees as independent contractors can come with steep penalties for employers—plus, it deprives workers of important rights and protections, so it’s important to understand the difference. Learn more about the key distinctions between the two under Maltese law below.

Worker classification in Malta: Key differences between contractors and employees

The Employment Status National Standard Order (S.L. 452.108) was added to the EIRA in 2012. It sets forth a list of criteria indicating when a worker is an employee, not an independent contractor. According to the law, an employment relationship likely exists if at least five of the following criteria align with a full-time employee.

Consequences of misclassification in Malta

If authorities like the Department of Industrial and Employment Relations (DIER) decide a contractor in Malta is actually an employee, their employer may face penalties such as:

• Back pay, including missed wages, social security, leave entitlements, redundancy pay, and other missed pay
• Fines for circumventing labor law
• Reputational damage, which can harm future recruitment prospects in Malta

Clearly defining workers’ roles from day one can save trouble down the road. If you direct a contractor’s daily tasks and expect them to work specific hours or use company equipment, look closely at their relationship to ensure they’re classified correctly. Maltese authorities take compliance seriously, so maintaining correct classification fosters trust and regulatory peace.

Wages and payroll in Malta

One of the most complex parts of global employment is managing wages and payroll in a new, foreign jurisdiction, and Malta is no exception. Calculating your new employee’s salary is only the beginning—you need to pay your Maltese workforce accurately and on time, while complying with relevant legal requirements and labor laws, like Malta’s complicated minimum wage structure, where wage floors vary by industry. Here’s what employers need to know.

Minimum wage in Malta

Malta’s minimum wage varies, depending on the employee’s age and industry. As of 2025, the national minimum wage is:

• ​€​​221.78 per week for employees ages 18 and over
• €215.00​ per week for employees aged 17
• ​€212.16 per week for employees under 17

The national minimum wage applies to employees not covered by a sectoral minimum wage. Sectoral wages are separate minimum wages for specific industries, set by wage regulation orders.

Payroll frequency in Malta

Malta’s labor law doesn’t fix a single pay cycle. Many employees receive monthly pay, though some roles, especially part-time or in certain service sectors, might do weekly or bi-weekly. The EIRA only mandates regular intervals, which shouldn’t exceed one month.

The most common approach to payroll, especially in white-collar industries, is to pay employees monthly via automatic bank transfers, distributing digital e-payslips as proof. Employers are also responsible for making the proper deductions, such as social security and their employees’ income tax payments (more on that below).

13th month pay in Malta

13th month pay is an additional salary payment, often given to employees as a vacation or holiday bonus. In some parts of the world, 13th month salary payments are mandatory. 

Maltese law doesn’t mandate a 13th month payment. However, some businesses still offer them as a benefit to help attract and retain top talent, especially since some European countries do dictate 13th month payments for employees. Offering 13th month salary payments or another type of bonus can help you stay competitive, especially in high-demand sectors like financial services.

However, Maltese employees do receive statutory bonus payments and allowances, each paid twice yearly:

• €135.10, paid June 15-30, covering the period from January to June
• €135.10, paid Dec. 15-23, covering the period from July to December
• €121.12, paid on the last working day of March, covering the period from October to March
• €121.12, paid on the last working day of September, covering the period from April to September

Keep in mind that bonuses are taxable. Part-time employees receive a pro-rated bonus according to the number of hours worked.

Run payroll compliantly in Malta

Payroll compliance means paying correct wages, withholding social security contributions and other taxes, forwarding income tax to the Commissioner for Revenue, and abiding by EIRA’s rules on breaks and leave calculations. Any slip-ups can lead to DIER inspections or fines.

Working with an EOR means getting all the help you need to handle deductions, adhere to local wage laws, and make accurate, on-time payments. Rippling EOR makes hiring and paying employees across the globe quicker and easier than ever.

Employer and employee taxes in Malta

For any organization with a global team, navigating taxes is a crucial yet complex part of business operations. Malta’s tax regime merges EU standards with local provisions, which are primarily governed by the Income Tax Act (Cap. 123) and the Social Security Act (Cap. 318). Employers are responsible for calculating the correct withholdings for their employees, which means understanding employer and employee costs is critical to staying compliant when expanding your business into Malta.

Here are the key things to understand about employer and employee taxes in Malta.

Employer taxes in Malta

Employee taxes in Malta

Maltese employees pay progressive income tax, meaning they pay higher tax rates the more they earn. Tax rates also depend on whether the employee is single, married, or a parent.

Single resident taxpayers (or married couples opting for separate filings):

Parents:

Penalties for not paying taxes in Malta

Neglecting tax obligations—be it withholding employees’ income tax or making your own social security contributions—can trigger fines, interest, or legal proceedings from the Commissioner for Revenue or the Department of Social Security. Maltese authorities generally adopt a cooperative approach, but repeated or grave infractions can be costly.

Look out for these common noncompliance risks for foreign businesses operating in Malta:

• Late FSS filings: If you miss monthly or yearly submissions, you might face surcharges, typically a percentage of the outstanding amount plus interest.
• Under-deductions: If you incorrectly calculate employees’ tax or SSC, you may need to pay the difference plus potential fines.
• Failure to provide payslips: If employees complain about missing or unclear payslips, the DIER (Department of Industrial and Employment Relations) could step in.

Paying taxes late or incorrectly not only invites legal trouble but also undermines your company’s brand. Mitigate problems with international tax compliance by letting an EOR handle payroll taxes on your behalf. They can ensure you pay all your local taxes correctly and on time, allowing you to focus on growing your business in Malta and beyond.

Employee benefits in Malta

Malta’s workforce expects a blend of statutory employee benefits (like social security and guaranteed leave schemes) and potential extras (like private health plans). One of the best ways to attract and retain top talent in a competitive hiring landscape is by meeting mandatory minimums and offering a comprehensive package of perks employees want.

Here’s an overview of statutory and optional benefits in Malta.

Mandatory benefits in Malta

Mandatory benefits (also called statutory benefits) are required by law, meaning employers must provide them for all eligible employees. In Malta, mandatory benefits fall under the Employment and Industrial Relations Act (EIRA, Cap. 452) and associated regulations. In addition to required leave, which we’ll cover in the next section, legally required benefits include:

• Social security: Both employers and employees contribute 10% to Malta’s social security system, which covers a number of important benefits:
• Pensions: Pensions provide savings for Maltese workers to support themselves after retirement.
• Health insurance: All workers who contribute to the system have access to Maltese national healthcare.
• Unemployment insurance: Unemployment benefits are available to workers who have made at least 50 weeks of contributions in the prior two years and are unemployed through no fault of their own.

Optional benefits in Malta

Providing mandatory benefits to eligible employees is non-negotiable. But employers can do more than the baseline and offer additional perks and fringe benefits to make their organization even more appealing, especially if they work in competitive markets or sectors where they need a boost.

Consider these value-add benefits to help you stand out:

• Health insurance: Private medical or top-up plans to expedite care beyond the public system is common.
• Flexible work arrangements: Telework or flexible hours can be particularly attractive in congested areas.
• Food allowances: Vouchers or partial reimbursements for lunches are popular perks in corporate offices.
• Professional development: Funding for courses or conferences aligns with Malta’s push toward skill development.

Offering more than the basic requirements is often essential in a small, tight-knit labor pool. If your brand invests in wellness or growth, you can better retain staff in a job market where word-of-mouth among professionals is influential.

Working hours, overtime, and leave in Malta

If you’ve ever hired international employees, you likely already know that one of the most complex parts of employing a global workforce is understanding (and complying with) various working hours, overtime, and leave laws—all of which can vary significantly across different borders and jurisdictions.

Malta largely abides by EU directives and follows a 40-hour workweek, but there are rules related to overtime, rest, breaks, and other nuances that employers need to know. Following these frameworks goes beyond just compliance; it ensures your staff get sufficient rest so you can keep productivity high and burnout low.

Standard working hours in Malta

Under the EIRA and other legislation in Malta, a normal workweek is typically 40 hours, split into five shifts of eight hours each. Some roles (such as shift-based work or hospitality roles) can go up to six days per week, but must average out to 40-48 hours of work per week.

Eight hours of work per day is typical for white collar workers, and Monday through Friday is a standard weekly schedule. It’s common for companies to adopt flexible starts to avoid peak traffic times, particularly in Malta’s busier, more congested cities. Firms that let employees start earlier or later can reduce commuter stress, helping to boost morale.

Overtime laws in Malta

Exceeding the typical 40 hours per week is considered overtime unless the employee’s contract stipulates a different number of base hours. The standard overtime pay rate is 1.5 times the employee’s regular wage, but certain sectors may have different overtime pay rates defined in their Wage Regulation Orders.

Typically, overtime is capped so that employees don’t work more than 48 hours per week. If an employee is going to work more than that, they must give their consent in writing—and they can withdraw their consent at any time. Employers must track hours meticulously to confirm compliance with overtime rules, especially if they have rotating or shift workers.

Rest period and break laws in Malta

Malta, following EU Working Time Directive guidelines, mandates daily and weekly rest periods. The rules call for:

• At least 11 consecutive hours of daily rest in every 24-hour period
• At least 24 consecutive hours of weekly rest—commonly Sunday in some sectors, though this can differ depending on the type of work or industry 
• At least a 15-minute break for every six hours worked, with many companies offering 30 or 60 minutes for lunch during an eight-hour shift

Leave laws in Malta

In addition to the rules around working hours and overtime, Malta requires employers to give their employees several kinds of paid leave, including annual time off, maternity leave, sick leave, and more.

Here are the types of leave employees are entitled to receive in Malta:

• Annual leave: Full-time employees are entitled to a minimum of 24 days of leave each year. As of 2021, if a public holiday falls on a Saturday, Sunday, or an employee’s rest day, the employee is entitled to an extra day of annual leave that year.
• Sick leave: Sick leave varies by industry and is set by the relevant WRO for each sector. In the event that a WRO doesn’t cover an employee, they’re entitled to 10 days of paid sick leave per year, covered by their employer. After that, additional sick leave is available via the social security system.
• Maternity leave: Employees who give birth are entitled to up to 18 weeks of maternity leave, beginning four weeks before the due date. They are required to take at least six weeks off after the birth. Maternity leave is paid at 100% of the employee’s usual salary or wage. The employer pays the first 14 weeks, and social security pays the rest.
• Paternity leave: Partners of employees who give birth are entitled to up to 10 days of paid paternity leave.
• Parental leave: Employees with at least one year of service are entitled to unpaid parental leave, which allows them to take up to four months off following the birth, adoption, or fostering of a child, up to the child’s eighth birthday.
• Other leave: Employers are required to allow employees to take paid leave for reasonable amounts of time in other special circumstances, including bereavement, jury duty, and if they are needed to serve as a court witness.
• Public holidays: Malta observes 14 public holidays. These include:
• New Year’s Day
• Feast of St. Paul’s Shipwreck
• Feast of St. Joseph
• Freedom Day
• Good Friday
• Workers’ Day
• Sette Giugno
• Feast of St. Peter and St. Paul
• Feast of the Assumption
• Victory Day
• Independence Day
• Immaculate Conception
• Republic Day
• Christmas Day

Work permits in Malta

As you expand your business into Malta, you may need to bring in foreign talent, which generally requires securing the right work permits. As an EU member, Malta welcomes talent from fellow EU/EEA countries without needing a typical work permit, but non-EU/EEA/Swiss nationals must follow strict guidelines to work legally in Malta. 

The most common route is typically the Single Permit, overseen by Identity Malta. If you plan to bring employees to the country, you’ll need to understand the process of sponsoring Malta jobs for foreigners, and take the right approach so your recruits can live and work without legal barriers. Here’s what you need to know.

Who needs a work visa in Malta?

Non-EU nationals require authorization when seeking jobs in Malta. EU/EEA/Swiss citizens can work freely in the country, but they must register with Jobsplus (the country’s public employment service) if they stay longer than three months. 

How long does it take to get a work visa in Malta?

Processing times vary depending on Identity Malta’s workload, the applicant’s documentation, and whether the job qualifies for Key Employee Initiative (KEI), a faster track for high-earning or specialized roles (like senior managers or advanced tech professionals). It’s a good idea to plan for the process to take at least four weeks and up to eight in some cases. If you need your new hire to start by a specific date, begin the visa application process well in advance and build in extra time for potential delays.

The visa application process typically includes:

1. Employment offer: The first step in qualifying for employment is for the applicant to have a job offer from an employer in Malta.
2. Documentation: The candidate prepares an employment contract, proof of qualifications, police conduct certificate (if required), proof of health insurance, and other documentation to submit with their visa application.
3. Identity Malta review: Identity Malta processes the application, which includes checking the local labor market conditions and ensuring no suitable EU national is available for that post.
4. Decision: If the visa is approved, it’s issued to the employee who can then travel to Malta. Depending on the visa type, it may be renewable after the initial term.

Types of work visas in Malta

Malta offers a few different work and residence visas. Selecting the right route depends on the candidate’s salary, qualifications, and your hiring speed needs. The most common types of employment-related residence permits are:

• Single Permit: The standard for indefinite or fixed-term roles. The Single Permit is tied to one employer, though switching is possible with a new application.
• Self-Employment: This is a special visa for self-employed entrepreneurs.
• Employment of less than six months: This is a special visa for short-term or seasonal employees.
• Blue Card: Under the EU’s Blue Card Directive, candidates may be eligible if the role meets certain salary thresholds (1.5 times the average gross annual salary in Malta) and skill criteria. The Blue Card allows more mobility within EU states, which is beneficial for high-level professionals.
• Intra-Corporate Transferee: If you’re moving staff from an overseas branch to a Maltese one under the same corporate group, you might use specialized ICT procedures to bring employees with you.

Termination and redundancy in Malta

During the hiring process, you may not be thinking ahead to termination procedures. However, in Malta, employee protections are robust and guided by the EIRA. Ending an employment contract—for performance issues or redundancy—demands clarity, notice, and potential remedies. Employers must adhere to the rules to avoid disputes and potential legal claims before the Industrial Tribunal.

Here’s what to know about termination and redundancy rules in Malta.

Does at-will employment exist in Malta?

At-will employment is a legal principle that’s common in the US. It allows either the employer or employee to end an employment relationship at any time, for any reason, or even without a reason, provided they don’t break any laws. For example, at-will employment doesn’t allow an employer to terminate an employee for a reason that could amount to discrimination.

At-will employment does not exist in Malta. Generally, indefinite contracts require valid reasons for dismissal, like misconduct or redundancy. However, you can terminate an employee if you honor the contractual notice period, provided it’s not an unfair termination under the EIRA. Just know that if an employee challenges a dismissal at the Industrial Tribunal, you must justify it. If you can’t show good cause, the Tribunal may award reinstatement or compensation to the employee.

Notice periods in Malta

Malta’s EIRA sets statutory notice periods for indefinite employees. The amount of notice required depends on the employee’s length of service:

Employers and employees can agree on a different notice period (either in the employment agreement or a collective agreement) as long as it isn’t less than the statutory minimum.

Severance pay in Malta

Malta doesn’t operate a typical severance system like some countries. Instead of mandated severance, employees get notice. If a redundancy occurs, the employer must follow legal steps, possibly redeploy staff, or pay out the correct notice. Collective agreements might mandate additional redundancy terms.

Collective agreements or individual contracts can include severance or gratuity payments, and some industries may have ex gratia separation allowances written into their WROs. In these cases, employers must honor the agreements and make these payments upon ending work agreements with their employees.

How to terminate employees compliantly in Malta

Malta’s Industrial Tribunal can reinstate an employee or order compensation if it deems a firing unjust. To stay compliant when terminating employees, follow these steps: 

1. Identify a valid reason for the termination. Malta doesn’t recognize at-will termination. Confirm if it’s redundancy, misconduct, or performance—lack of cause can risk an unfair dismissal claim.
2. Offer notice for the terminated employee. The required length of notice depends on the employee’s years of service.
3. Carefully document everything. Provide a written letter stating the reason for the termination, referencing the relevant EIRA provision if needed.
4. Pay the employee’s final wages. Pay out any outstanding wages, leftover vacation, or other contractually promised sums.

When managing a global team, keeping track of termination regulations can be a challenge. Employers have to contend with just-cause rules, varying notice and probation periods, and inconsistent severance laws across different jurisdictions. Instead, consider partnering with an EOR solution, which can take care of compliance on your company’s behalf, ensuring you stay on the right side of the law from onboarding to offboarding.

FAQs about hiring in Malta

Can I hire employees in Malta without my own legal entity?

Yes. You can use an employer of record (EOR)—the EOR acts as the official employer of your Maltese workforce, handling local payroll, social security, and taxes, while you still oversee daily tasks and responsibilities. This arrangement can suit short-term expansions or smaller teams, but can be more costly as staff numbers grow.

An EOR like Rippling can help you quickly tap into Malta's talent pool, grow your global workforce, and reduce both compliance risks and administrative workload.

How do you onboard a new employee in Malta?

It doesn’t matter where in the world you expand your business (or hire new talent)—a comprehensive onboarding process allows you to build a foundation for a strong working relationship with your international workforce. Onboarding begins well in advance of a new hire’s first day, so plan to get started on the administrative tasks like paperwork and background checks before your Maltese employee’s start date. In Malta, onboarding extends beyond the contract: New hires typically expect a warm introduction to the team and your organization to set the tone for their tenure.

What is the difference between an independent contractor and an employee in Malta?

According to the Employment Status National Standard Order, added to the EIRA in 2012, employees work under their employer’s supervision and control, are more integrated into their employer’s organization, and receive statutory benefits. Independent contractors provide services under civil or commercial contracts, which gives them more freedom over when, where, and how to complete their work. They submit their own taxes and aren’t covered by the same protections as employees, such as EIRA leave and notice rules.

How much does it cost to hire an employee in Malta?

Beyond net salary, employers are responsible for contributing to Malta’s social security system for each employee.

Employer taxes in Malta include:

What are the requirements for work permits in Malta?

Non-EU/EEA/Swiss nationals typically need a work permit before seeking jobs in Malta for expats. The most common type is the Single Permit, a combined work and residence visa for skilled workers. EU/EEA citizens can work freely in Malta but must register if they stay longer than three months. Employers typically need to sponsor visas when hiring foreign workers, and part of the process may be showing that no suitable local candidates could fill the role.

What is always required when an employer terminates an employee in Malta?

At-will employment isn’t recognized in Malta, so employers are required to identify a valid cause and give notice. The required notice amount varies depending on how long the employee has been in service. Employers are also required to pay out leftover wages and leave. Unjust termination can lead to Industrial Tribunal claims.

How does a US company pay a foreign employee in Malta?

There are generally three ways a US company can pay a foreign employee in Malta:

1. Form a local entity and open a local bank account to run payroll according to Maltese law (including all relevant withholdings).
2. Partner with an EOR that specializes in global employment and manages salary, insurance, and taxes on your behalf.
3. Use a global payroll service that can integrate payroll for multiple countries.

Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.