Employer of Record Malta
An Overview of Employing in Malta
Salary currency
Euros (€)
Salary Pay Date
Salaries should be paid in twelve equal instalments not exceeding four weeks in arrears.
Salary
The national minimum wage in Malta is 181.08 EUR (2021).
Malta observes an equal rate of pay for all employees who perform the same duties. Should an employer implement a pay scale to honour length of service or annual increments they should set a maximum that is achieved within a specified time period.
Employees are entitled to a weekly allowance payment of 121.16 EUR, payable in March and September.
Additionally, Malta observes an obligatory cost of living increase. A full-time employee is entitled to the full amount and a part-time employee should receive a pro-rata payment.
Bonus
All employees are entitled to a statutory bonus of 135.10 EUR payable every six months (at the end of June and from 15th to 23rd December.
Any additional bonuses the employee may be entitled to should be outlined in the contract of employment and must be approved. Bonus payments will be paid alongside the monthly salary and are subject to income tax.
Social Security System
All persons in employment are required to pay Social Security contributions in accordance with the Social Security Act to cover the welfare benefits system and public healthcare.
Both the employee and employer contribute 10% of the employee’s monthly income (before tax) to the Social Security Fund. Contributions are capped on a maximum weekly salary of 485.74 EUR (2021).
Healthcare
Malta has a public healthcare system that is free at the point of use in state-owned clinics and hospitals. This is accessible to any person who meets the requirements of the Maltese Social Security system and is funded by taxes.
Private healthcare options are additionally available across the island.
Dental care is predominantly privatized, with the exception of minor emergency treatment.
Employers’ Costs
| Gross annual salary | Social Security contribution |
|---|---|
| Up to 25,258.00 EUR | 10% |
| Exceeding 25,258.00 EUR | 48.57 EUR (flat rate) |
An Overview of the Main Statutory Benefits
Pension
Malta operates a Contributory Retirement Pension funded through Social Security contributions. The main pension scheme is the ‘Two-thirds pension’, which aims to provide a maximum pensionable income equivalent to two-thirds of the employee’s salary prior to retirement. Pension rates vary dependent on average contributions.
Sickness
Employees are entitled to 10 days of sick leave per annum at full pay. The employer is liable to pay the first three days of any claim for sick leave. From the fourth day of incapacity, an employee may claim sickness benefits through the Social Security system.
A medical certificate must be presented to the employer.
Maternity & Paternity
A pregnant employee is entitled to eighteen weeks of uninterrupted maternity leave. Six weeks of this leave must be taken following the birth of a child.
For the first fourteen weeks, full wages should be paid by the employer. The subsequent four weeks are considered optional and are unpaid by the employer. The employee may be entitled to Maternity Leave Benefit funded through Social Security contributions.
The employee is required to inform the employer in writing at least four weeks prior to the commencement of leave.
A parent can apply for four months’ unpaid leave until their child is eight years of age following 12 months of continuous service.
Employees are exempt from working overtime if they are pregnant or within 12 months of the birth or adoption of a child.
Contractual Provisions
Contract of employment
A contract of employment can be oral or written in either Maltese or English.
Contracts can be indefinite or fixed-term (up to a maximum of four years).
Probationary Period
The probationary period can be up to 12 months. For any service longer than one month, a one-week notice period applies upon termination.
Working Hours
Normal working hours are 40 per week. Working hours should not exceed 48 hours when averaged over a 17-week period.
Employers are obliged to record the number of hours worked by their employees.
Overtime
In Malta, working hours are strictly regulated and many job sectors have overtime rates stipulated by the Wage Regulation Order. All other employment categories should honour a pay rate of 1.5 times the employee’s hourly rate for hours worked in excess of a 40-hour week, averaged over a period of four weeks.
The contract of employment may specify a clause for overtime allowance.
Inclusive of overtime, an employee should not exceed the 48-hour maximum average working hours.
Additional Leave
Termination
Indefinite term contracts may be terminated by: good and sufficient cause or mutual agreement.
In the case of a fixed-term contract, a compensation payment of 50% of the salary due for the remaining period of the contract. All outstanding wages should be paid by the next pay date.
In the case of redundancy, an employer is legally obliged to re-engage an employee if the post becomes available within a period one year.
Notice Period
| Continuous Length of Service | Notice Period |
|---|---|
| 1 month to 6 months | One week |
| 6 months to 2 years | 2 weeks |
| 2 years to 4 years | 4 weeks |
| 4 years to 7 years | 8 weeks |
| More than 7 years up to 8 years | 9 weeks |
| More than 8 years up to 9 years | 10 weeks |
| More than 9 years up to 10 years | 11 weeks |
| More than 10 years | 12 weeks |
*The Maltese Employment Code states that longer periods may be agreed in the case of technical, administrative, executive or managerial posts; however, this must be agreed by both the employer and employee. An established period cannot be extended.
*If employment is terminated during the probationary period, a notice period of one week should be given for all service exceeding one month.
Holiday Entitlement
An employee is entitled to a minimum of 24 days holiday, to be outlined in the contract.
Holiday entitlement begins from the commencement of employment and runs in accordance with the calendar year. Where an employee is in employment for less than one calendar year, they are entitled to a proportionate amount of annual leave.
Employees may carry forward up to 50 per cent of their annual leave entitlement to the following calendar year, if agreed with the employer.
A minimum period equivalent to four weeks cannot be replaced by any allowances, except in the case of termination. Upon termination, any outstanding leave due should be compensated financially.
Public Holidays
Malta observes 14 holiday days: nine public holidays and five national days per annum. Should a public holiday fall on a weekend, the employee is entitled to an additional day in lieu.
| Public holidays | |
|---|---|
| New Year’s Day | 1st January |
| Feast of St. Paul’s Shipwreck | 10th February |
| Feast of St. Joseph | 19th March |
| Freedom Day | 31st March |
| Good Friday | In accordance with Western Calendar |
| Workers’ Day | 1st May |
| Sette Giugno | 7th June |
| Feast of St. Peter and St. Paul | 29th June |
| Feast of the Assumption | 15th August |
| Victory Day | 8th September |
| Independence Day | 21st September |
| Immaculate Conception | 8th December |
| Republic Day | 13th December |
| Christmas Day | 25th December |
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