Malta countryintel banner
Country Intel

Employer of Record and Payroll Services in Malta Malta flag

mercans logo

Mercans-owned legal entity
We have our own legal entity to protect your business from risk and provide you and your employees with a distinctive experience.

Services available

  • Employer of record
  • Contractor management
  • Global payroll
  • In-country payroll

Mercans offers complete payroll, PEO and HR services in Malta

While a small economy, Malta is well known as a tourist destination and in recent years, has been recognised as a financial services hub. Manufacturing continues to remain an important sector of the economy. Since the country’s push into industrialization, it has invested heavily in developing its workforce through education and training. The primary industry sectors include advanced manufacturing, aviation, education, healthcare, ICT and life sciences.

Doing Business in Malta

Setting up a business is easy and transparent and entrepreneurs are able to seek assistance from Malta Enterprise which provides assistance including pre-investment fact finding. There are a variety of private investment funds available including several pension plans for foreign citizens.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Malta is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking Hours: 8:30 am to 1:30 pm from Monday to Friday, Saturday (8:00 am - 12:30 pm).

Working Week

The standard working week is from Monday to Friday from 8:00 am - 4:00 pm.

Labor Law

The main sources of Maltese labor law are the Constitution, the Employment and Industrial Relations Act (EIRA), the Employment Commission Act as well as selected EU regulations and directives.

Main Industries

Tourism, electronics, ship building and repair, construction, food and beverages

GDP Growth

2.3%

Dates & Numbers

dd/mm/yyyy

Official State Name

the Republic of Malta

Population

0.51 million

Capital

Valletta

Major Languages

English, Maltese

Currency

Euro

Internet Domain

.mt

International Dialing Code

+356

Malta
Valletta, MT
7:10 am, February 9, 2023
10°C
overcast clouds

Payroll

Wages must be paid in cash or cheque, at regular intervals of a week, fortnight or month, unless otherwise agreed. Wages must also be paid directly to the employee.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 6 years

Reports

Employees are entitled to receive paid annual leave of 9 days

Annual Leave

Employees are entitled to receive paid sick leave of 14 days

Sick Leave

Employees are entitled to 14 weeks of paid maternity leave as applicable. Paternity leave is not a statutory entitlement

Maternity & Paternity Leave

An employer must provide an employee with 6 months’ notice of termination of the employment relationship

Employee Termination

There are no provisions mandated by law regarding the 13th month salary

13th month salary

181.08 EUR per week

Minimum Wage

Overtime pay is calculated at the rate of 1.5x the employee's ordinary rate of pay for a total of 40 hours of overtime

Overtime

There are no provisions mandated by law regarding severance pay

Severance Pay

Tax and Social Security

Mlalta taxes individuals who are both domiciled and ordinarily resident in Malta on their worldwide income. Employment in Malta is also governed by the provisions of the Social Security Act.

Tax

A non resident individual is taxed only on income and chargeable gains arising in Malta. Employees resident in a country with which Malta has a double taxation relief agreement may be exempt from tax in Malta if the treaty conditions are met.

35%

Corporate Income Tax

35%

Personal Income Tax

18%

Sales Tax

18%

VAT

Social Security

There have been certain international agreements concluded by Malta which allow contributions paid in one country to be credited for social security purposes in the other country.

20%

Social Security Rate

10%

Social Security Rate for Employers

10%

Social Security Rate for Employers

Employment Law

Maltese labor law is based on the contractual agreement between the employer and employee provided that the statutory conditions of employment are met.

Employment Agreement

Employment agreements may be entered for a fixed or indefinite term. A fixed term agreement may be renewed up to a maximum of four years.

Working condition

There have not been any new employee rights or protections introduced following the pandemic. However, prior to the pandemic, there were already provisions in place for teleworking.

Leaves

The minimum annual vacation leave with full pay of every full time employee is four working weeks and four days each. Every full time employee must be provided with a minimum of one day of rest each week.

Employment termination

Employers are not prohibited from agreeing with an employee about the termination of employment where the employee waives their rights in return for a payment. There is also no law expressly regulating the procedure for settlement agreements. Employers are only required to pay the wages covering the notice period. They are not required to pay any severance pay over and above the wages covering the notice period.

Less than a month

Minimum notice period for terminating an employee

14 days

Total number of public holidays

40

Working hours per week

3 days

Total number of days for Compassionate & Bereavement Leave

Immigration

A third country national who holds an employment license shall also acquire a Maltese residence permit for the period of employment, which must be renewed annually.

Residency permits

A third country national who has resided legally and continuously in Malta for five years shall be granted a long-term resident status.

Work Permit Validity

1 year

Required Documents

The applicant’s duly completed visa application form

A cover letter stating the purpose of the applicant’s trip to Malta

The applicant’s valid passport with at least two blank pages

Two passport photos

Proof that the applicant has travel medical insurance coverage for the entire Schengen area

The applicant’s employment contract with a company based in Malta

Proof of the applicant’s accommodation in Malta for the duration of their stay

Evidence of sufficient financial means to cover the entire period of the applicant’s stay.

Compliant, reliable, error-free and touchless payroll in Malta

Build the best team and hire top talent compliantly in Malta. Get in touch with Malta payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
Tell us where you want to grow.
Our team regional experts are here to support you with global expansion plans.

    Learn how we can help you comply with Local labor law
    Discover the best-in-class Payroll solution