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Global Payroll Team
Written by Global Payroll Team
Last updated May 7, 2026
Expert Reviewed
Payroll in Malta
Tax in Malta
Immigration in Malta

Malta map

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Mercans offers complete payroll, PEO and HR services in Malta

While a small economy, Malta remains a well-known tourist destination and an established hub for financial services, gaming, ICT, aviation, advanced manufacturing, healthcare and life sciences. Its strategic location, English-speaking workforce and EU market access continue to support foreign investment and international business operations.

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Doing Business in Malta

Setting up a business in Malta is generally transparent and businesses may seek support from Malta Enterprise and other public bodies depending on the activity involved. Malta offers a stable EU regulatory framework, but employers should still plan for sector licensing, payroll, labor, tax and immigration compliance requirements.

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 vary by institution and branch, but many banks operate during standard weekday business hours.

Working Week

The standard full-time working week is generally 40 hours, usually spread over five days, unless a different arrangement applies under the employment contract or sector rules.

Labor Law

The main sources of Maltese labor law are the Constitution, the Employment and Industrial Relations Act, subsidiary legislation, collective agreements where applicable, and selected EU-derived employment rules.

Main Industries

Tourism, financial services, gaming, ICT, advanced manufacturing, aviation, construction, food and beverages

GDP Growth

6.8%

Dates & Numbers

dd/mm/yyyy

Official State Name

Republic of Malta

Population

0.57 million

Capital

Valletta

Major Languages

Maltese, English

Currency

Euro (EUR)

Internet Domain

.mt

International Dialing Code

+356

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Malta
Valletta, MT
1:40 pm, June 3, 2026
26°C
broken clouds
66 %
Wind Gust: 14 mph
Clouds: 65%
Sunrise: 5:46 am
Sunset: 8:13 pm

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Payroll

Wages must be paid at regular intervals agreed between the parties, such as weekly, fortnightly or monthly, and employees must receive an itemised payslip on or before the date wages are due.

It is acceptable to provide employees with online payslips

Payslip

Payroll and employment records should be retained in line with Maltese recordkeeping requirements

Reports

Employees with a 40-hour week are entitled to 216 hours of paid annual leave in 2026

Annual Leave

Sick leave varies by Wage Regulation Order. Where no specific order applies, the minimum entitlement is generally two working weeks per year

Sick Leave

Employees are entitled to 18 weeks of maternity leave and 10 working days of paid paternity leave

Maternity & Paternity Leave

Notice of termination depends on service length and may range from 1 week to 12 weeks in standard cases

Employee Termination

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

13th month salary

229.44 EUR per week

Minimum Wage

Overtime pay is generally calculated at 1.5x the employee’s ordinary rate of pay, subject to sector rules and working time limits

Overtime

There are no general statutory provisions mandating severance pay, although notice pay and other termination rights may apply

Severance Pay

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Tax and Social Security

Malta taxes individuals who are resident and domiciled in Malta on worldwide income, while persons who are resident but not domiciled are generally taxed on Malta-source income and certain foreign income remitted to Malta. Employment in Malta is also governed by the Social Security Act.

Tax

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

35%

Corporate Income Tax

35%

Personal Income Tax

18%

Sales Tax

18%

VAT

Social Security

Malta’s social security system is financed through Class 1 contributions for employed persons. In standard cases, both employer and employee contribute 10% of the basic weekly wage, subject to statutory minimums and maximums, and employers also fund the Maternity Leave Fund contribution.

20%+

Social Security Rate

10%+

Social Security Rate for Employers

10%

Social Security Rate for Employees

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Employment Law

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

Employment Agreement

Employment agreements may be entered into for a fixed or indefinite term. Fixed-term contracts are allowed, but renewals and continued use may trigger conversion risks under Maltese employment rules if used improperly.

Working condition

The normal weekly working time is generally 40 hours. Flexible work and telework arrangements may be used where agreed, subject to applicable employment rules and working time protections.

Leaves

Full-time employees are entitled to paid annual leave, public holiday entitlements, maternity and paternity leave, and other statutory leaves such as parental and urgent family leave where the legal conditions are met.

Employment termination

Employers are generally required to give notice based on the employee’s continuous service, except in cases where termination without notice is allowed by law, such as gross misconduct. Settlement arrangements should be handled carefully and in compliance with Maltese employment law.

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1 week

Minimum notice period for terminating an employee

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14 days

Total number of public holidays

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40

Working hours per week

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1 week

Total number of days for Compassionate & Bereavement Leave

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Immigration

A third-country national who intends to work and reside in Malta will generally need a Single Permit or another appropriate employment-related residence route, depending on the role and immigration category.

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Residency permits

The Single Permit is the main route for many third-country nationals taking up employment in Malta. It combines residence authorization and work authorization and is typically issued for a defined period, with renewal available where the conditions continue to be met.

Work Permit Validity

Most permits are issued for 1 year, though some cases may qualify for 2 to 3 years

Required Documents

The applicant’s duly completed application form

A valid passport

Passport photos

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

Proof of accommodation in Malta

Proof of health insurance where applicable

Supporting employer and labor market documentation where required

Any additional documents requested by Identità or the competent Maltese authorities

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.
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    FAQs

    What is an Employer of Record (EOR) in Malta and how does it support foreign companies?

    An Employer of Record in Malta acts as the legal employer for your workforce in Malta, taking responsibility for employment contracts, payroll, social contributions and compliance with Maltese labour law, allowing a foreign company to hire locally without forming a Maltese entity.

    Why should businesses use an EOR instead of setting up a legal entity in Malta?

    Using an EOR in Malta removes the need to establish a local legal entity which saves time and cost, enables faster access to the local talent market and provides full compliance from day one so your company can focus on operations rather than entity setup.

    How does payroll outsourcing in Malta ensure compliance with local tax and labour regulations?

    Payroll outsourcing in Malta ensures salaries are processed correctly, tax and social security contributions are withheld and reported accurately and statutory filings are made on time in accordance with Maltese law thus reducing risk of non-compliance.

    Can an Employer of Record in Malta hire employees and manage work permits for international companies?

    Yes. An EOR in Malta can hire employees on behalf of your company and support work permit and visa processes for non-resident nationals ensuring that both expatriate and local hires are legally employed and compliant in Malta.

    What are the main benefits of using EOR and payroll services in Malta for global expansion?

    Key benefits include rapid entry into the Maltese market without entity formation, full legal compliance with labour and tax rules, reduced administrative and legal overhead, access to local HR and payroll expertise and flexibility to scale your Maltese workforce as your business grows.

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