Employer of Record in Malta

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Malta if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Malta below, to avoid any compliance issues.

Employment Contract Requirements

The onboarding process in Malta spans five business days, requiring completion of documents a day prior to the commencement date. Contracts need to be composed in English, written down, and duly signed by both involved parties detailing:

• Name of parties Involved
• Commencement date of employment
• Length of the employment
• Job description
• Termination conditions

Onboarding Process

We can help you get a new employee started in Malta quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Malta

The typical daily working schedule consists of 8 hours, totaling 40 hours over a standard workweek, spanning from Monday to Friday. There is an option to extend the maximum workweek to 48 hours if necessary.

Overtime in Malta

Overtime compensation is mandatory for hours worked beyond regular schedules. Without written consent, the maximum weekly work limit is 48 hours. Extra hours are compensated at 150% of the hourly rate for work on Monday to Saturday and 200% for work on Sundays or Public Holidays.

Probation Period in Malta

The following details are relevant to probationary periods in Malta:

• For fixed-term contracts lasting from 6 to 15 months is calculated as two months for every 6 months of contract duration.
• For a fixed term contract lasting for more than 15 months, the probationary period will be 6 months.
• For contracts exceeding 15 months, the probationary period is fixed at 6 months.
• Employees in technical, executive, administrative, or managerial roles earning at least double the national minimum wage face a 12-month probationary period.

Growing your team in Malta is exciting, but it’s not without challenges. Local labor laws are often nuanced, and hiring without the right legal structure or processes can lead to misclassification, non-compliance penalties, or disputes. An Employer of Record removes that risk by acting as the legal employer on your behalf, taking full responsibility for compliance, contracts, payroll, and employee benefits.

This gives you the freedom to scale at your own pace, whether you're adding one employee or building out an entire function, without the burden of setting up and managing a local entity. You remain in control of day-to-day responsibilities and performance, while the EOR ensures every hire is legally protected and properly supported. It's a strategic way to expand globally without spreading your internal team too thin or exposing your business to legal liabilities in unfamiliar markets.

Understanding payroll and employment taxes in Malta is essential for employers to ensure compliance and avoid penalties. Key taxes include progressive income tax rates ranging from 0% to 35%, social security contributions at the rate of 10% for both employers and employees (with fixed rates of EUR 54.43 per week for annual salaries exceeding EUR 28,303), and maternity fund contributions.

Employers must adhere to specific deadlines for tax submissions and payments, with monthly employee tax deductions due by the 15th day of the following month. Utilizing payroll management software, such as Playroll, can streamline processes and help maintain compliance with Maltese regulations.

As of January 1, 2025, Malta's minimum wage is set at €961 per month.

Employees expect to be paid accurately, on time, and in full compliance with local standards. When you're hiring in Malta, providing a smooth payroll experience is critical to retention and trust. An Employer of Record ensures that employees receive what they’re owed, without errors, delays, or confusion about taxes or benefits.

Key Ways an EOR Supports Payroll in Malta:

• Reliable Salary Payments: Ensures employees are paid promptly in local currency.
• Clear Payslips & Documentation: Provides employees with compliant, understandable records.
• Correct Benefits & Contributions: Delivers legally mandated contributions and any changes in compensation, like bonuses.
• Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
• Boosts Employee Confidence: Builds trust with compliant, consistent payroll operations.

In Malta, employers seeking to hire foreign nationals must comprehend the distinctions between work permits and visas, including the Single Permit, EU Blue Card, and Nomad Residence Permit. Each has specific eligibility criteria, application procedures, and associated fees. Employers are responsible for obtaining the necessary employment licenses and ensuring compliance with Maltese labor laws.

Challenges such as skills shortages and high salary demands necessitate strategic approaches, including offering competitive compensation, investing in employee development, and fostering a positive workplace culture to attract and retain talent effectively.

Mandatory Leave Entitlement in Malta

The annual leave entitlement in Malta is 24 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Malta

In Malta, there are 14 legally mandated national public holidays annually.

Paid Time Off in Malta

in Malta, full-time employees are entitlement to 24 working days of paid leave. Part-time employees receive a pro-rata allocation based on their hours worked.

Maternity Leave In Malta

Pregnant employees with 6 months' consecutive service are entitled to 18 weeks' paid leave. They must take 4 weeks pre-birth, receiving full salary throughout. The employer covers the first 14 weeks, and Social Security handles the remaining 4 weeks.

Paternity Leave In Malta

Malta does not have legally mandated paternity leave.

Sick Leave In Malta

Employees are granted paid sick leave for a maximum of 10 days (80 hours). The payment rates and providers vary depending on the duration of the illness as follows:

• In Malta, sick leave ranging from 0 to 3 days is covered and paid by the employer at 100% of the base salary.
• Sick leave ranging from 0 to 3 days is covered and paid by the Social Security at 100% of the base salary.

Parental Leave In Malta

Male and female employees have the right to take up to four months of unpaid parental leave for childbirth, adoption, fostering, or legal custody until the child turns eight. To be eligible, the employee must have worked continuously for the same employer for at least 12 months.

Bereavement Leave

Employees are entitled to 1 day bereavement leave fully paid by the employer.

Marriage Leave

Employees are entitled to 2 day marriage leave fully paid by the employer.

Jury Service Leave

Employees have the right to fully paid jury service leave provided by the employer, lasting for the required duration.

Injury Leave

Employees have the right to fully paid injury leave provided by the employer, lasting for a maximum of 1 year.

In Malta, failing to provide the correct employee benefits can have serious consequences. Mistakes in benefits administration may result in fines and harm your reputation as an employer. An Employer of Record ensures statutory benefits and leave are handled correctly, every time, and provides comprehensive options for extra perks to reward your team.

Beyond just avoiding legal issues, a well-managed benefits program builds trust with your employees. An EOR ensures benefits are set up quickly during onboarding, updated when employee status changes, and fully compliant with national regulations. They also manage communication with employees, so there’s no confusion around what’s offered and how to access it. This combination of legal compliance and positive employee experience is hard to replicate without local infrastructure. With an EOR, you can offer peace of mind to your team (and to yourself) knowing that your benefits program in Malta is running as it should.

Termination Process in Malta

In Malta, employers can validly terminate a fixed-term contract for the following reasons:

• Misconduct
• Redundancy
• Retirement age reached

Notice Period in Malta

In Malta, the required notice period depends on the length of service and the grounds for termination, outlined as follows:

• No notice period is required for employees with less than month service
• 1 week for an employee with between 1 and 6 months of service
• 2 weeks for an employee with between 6 months and 2 years of service
• 4 weeks for an employee with between 2 and 4 years of service
• 8 weeks for employees with between 4 and 7 years of service
• 9 weeks for employees with between 7 and 8 years of service
• 10 weeks for employees with between 8 and 9 years of service
• 11 weeks for employees with between 9 and 10 years of service
• 12 weeks for employees with more than 10 years of service

Severance in Malta

Mandatory severance pay is not specified within Maltese labour law.