Payroll and Benefits Guide - Malta

Malta
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Currency

Euro (EUR)
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Capital

Valetta
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Employer Taxes

10.00% or 51.60 EUR (flat rate per week)

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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

The official languages of Malta are Maltese and English, with Maltese being the national language.

Malta has a rich and diverse history, with evidence of human habitation dating back to around 5200 BC.

Malta is famous for its ancient temples, such as the ń†gantija temples on the island of Gozo.

Malta is known for its crystal-clear waters and beautiful beaches.

Malta is one of the smallest countries in the world.

Malta is a popular destination for language learning.

Contributions

Employee Payroll Tax

Contribution Type Rate
Social Security 10.00%
Social Security 51.60 EUR (flat rate per week)

Employer Payroll Tax

Contribution Type Rate
Social Security 10.00%
Social Security 51.60 EUR (flat rate per week)

Payroll

Payroll Cycle

Payday for salaries is the 25th of each month.

13th Salary

The law makes no mention of thirteenth salary.

Work Hours and Week

In Malta, a typical full-time workweek is 40 hours, or 8 hours each day.

The Wage Regulation Orders provide that the regular working hours are 40 hours per week, however they cannot exceed a maximum of an average of 48 hours per week over a period of 17 weeks.

Overtime

The Wage Regulation Order (WRO), which specifies various overtime standards per industry, governs overtime. The worker must give their written approval, which is revocable at any moment. Overtime is computed at 150% of the usual pay rate for work exceeding 40 hours per week and averaged over four weeks if the WRO does not cover the employee.

Instead of a limit of 100 hours of overtime, the income tax rate that applies to qualifying overtime is 15% up to a maximum amount of emoluments of 10,000 EUR. Any overtime compensation in excess of this is taxed at the regular relevant rates of income tax.

Leave

Paid Time Off

Employees who work full-time and log 40 hours per week are entitled to 24 working days of paid leave (prorated for part-time workers).

According to the legislation, a minimum of four weeks cannot be substituted by any benefits, unless the job is terminated.

Public Holidays

Weekend public holidays are included in the employee’s yearly vacation allocation and can be used as make-up time instead of paid time off.

Sick Days

The Wage Regulation Order (WRO) governs sick leave. Employees who are not covered by the WRO are entitled to two weeks (10 working days) of sick leave each year. An employee can be eligible for a Social Security illness benefit after two weeks.

For all sick days, the employee is required to present a medical certification.

Maternity Leave

In Malta, maternity leave is 18 weeks long, begins 4 weeks before the projected due date, and lasts as least until 6 weeks after the baby is born.

For the first 14 weeks, the employer will pay the maternity benefit at 100% of the usual rate of pay; the remaining weeks will be covered by Social Security.

Paternity Leave

Paternity leave is not mandated by law in Malta.

Parental Leave

For the birth of a child, adoption, foster care, or general care until the kid turns eight, parents are entitled to four months of paid leave.

The employee’s employment must have lasted at least 12 months in a row for them to be eligible.

Termination

Termination Process

A fixed-term employment agreement may be terminated by the employer for any of the following reasons: business, personal, or employee misbehavior. It necessitates notification and a justification for the termination in writing. A warning must be delivered and the employee is given the chance to defend their actions if the cause is misbehavior.

In Malta, an employer has the right to fire an employee for good reason, for being made redundant, or for attaining retirement age. The employer shall submit an employment certificate upon request from a worker who has worked for at least one month and includes the dates of employment, a description of tasks, and the reason for termination.

Additionally, an employee has the right to pursue financial compensation for any remaining unpaid leave upon termination of employment.

Notice Period

According to the duration of service and the grounds for termination, the required amount of notice is as follows:

  • There is no need for a notice period if an employee has less than one month of employment.
  • One week of notice is necessary for an employee with between one and six months of service.
  • Two weeks’ notice is necessary for an employee with between six months and two years of service.
  • Four weeks’ notice is necessary for an employee with between two and four years of service.
  • Eight weeks’ notice is needed for an employee with four to seven years of service.
  • Nine weeks’ notice is necessary for an employee with seven or eight years of service.
  • Ten weeks’ notice is necessary for an employee with between eight and nine years of service.
  • Eleven weeks’ notice is needed for an employee with between nine and 10 years of service.
  • Those with more than 10 years of employment must give twelve weeks’ notice.

The employee may get payment in lieu of notice. If an employee is required to work the notice period but decides not to or quits their job without giving notice, they must pay the employer 50% of the salary they would have received during that time.

Severance Pay

On severance payment, there are no legislative laws.

Probation Period

Probation Period

Malta updated its employment law framework in 2023, including the requirement that definite contracts have a minimum term of six months.

The employment connection should not be subject to a new probationary term in the event of a renewal of a defined contract for the same job and tasks.

The probationary period will be computed using a two-month probationary period for every six months of the fixed-term contract’s tenure, which can range from six to fifteen months.

The probationary period will be one-third of the fixed-term contract’s duration if it is less than six months in length.

The probationary period must be six months if the fixed-term contract is more than 15 months.

Technical, executive, administrative, and management employees whose salaries are at least double the national minimum wage must serve a 12-month probationary term.

Immigration

Employers of foreign nationals have a number of alternatives under Malta’s immigration legislation. Malta is a member of the Schengen Area and the European Union (EU). Depending on the kind of visa, there are different requirements, processing timeframes, job restrictions, and advantages for accompanying family members.

Unless they are visa-exempt due to their nationality, business travelers visiting Malta usually utilize a localized Schengen C Visa. Within 180 days, the Schengen Area only permits stays of 90 days.

Foreigners coming to Malta for employment must get a Single Permit, which includes work and residency authorization. The Single Permit is extendable for an additional year.

VAT

The commonly used standard rate of VAT in Malta is 18.00%.