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Hiring in Malta? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Malta.
Employment norms in Malta
Malta or the Republic of Malta is an archipelago located in the Mediterranean Sea. The country is a part of the European Union. The country follows the basis of the European Union's employment directives and safeguards. Malta's proximity to other European and African business hubs makes it a lucrative destination for business expansion. EOR services help potential employers navigate through complex norms while ensuring legal compliance.
General Information:
- The Maltese currency is Euro (EUR).
- Valetta is the capital of Malta.
- Maltese and English are the languages of Malta. Documentation can be in Maltese or English to be considered legally valid.
- As of 2021, the of Malta was reported to be USD 17.36 billion.
The Employment and Industrial Regulations Act (EIRA) regulates most of the employment laws in Malta.
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking Hours and OvertimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
- Agreements can be in writing or verbal. Written agreements are always required for permanent employees at least.
- The contracts can be for a fixed term or an indefinite period. Fixed-term contracts can be renewed for up to 4 years.
- The agreements or contracts can be in or Maltese.
- The contract must include terms such as the nature of work, payment, termination clauses, overtime rates, working hours, etc.
Onboarding Process
While there is no mandatory onboarding process, some common practices include -
- The employee must be given a copy of the employment contract.
- New employees must be enrolled with tax authorities and applicable social security schemes.
- The employees must be given an idea of the work expected and about the company policies and common practices.
Visa
Malta comes under the Schengen Zone. Schengen visas for Malta are issued for different stay durations.
Work Visa:
- A work permit or employment license is additionally required to work in Malta. A long stay or D visa is required in such cases.
- The following are the requirements for a work visa.
- Employment contract from an employer in Malta
- Work permit
- Travel medical insurance
- Valid passport
- Proof of accommodation
- Proof of adequate finances
- Other requisite application documents
Business Visa
The visa is valid for up to 90 days in a 180-day time frame. The following are the requirements for a business visa to Malta.
- Letter of invitation from the Maltese company
- Copy of the ID of the person inviting
- Letter from the applicant's employer
- Proof of adequate finances
- Proof of accommodation
- Round trip confirmed flight tick
- Letter explaining the intention of the visit
- Civil status proof
- Travel medical insurance
- Other requisite application documents
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Minimum Wage
The wage in Malta is EUR 192.73 per week for employees who are aged 18 and above.
Payroll Cycle
The cycle in Malta is usually monthly.
Annual Bonus
There is no mandatory annual bonus in Malta. However, 13th month pay is common.
Health Benefits
- The National Health Service (NHS) of Malta provides almost free healthcare to all Maltese residents.
- The public healthcare system is robust and provides almost universal coverage.
- Employers can also choose to provide employees with private health insurance.
Working Hours and Overtime
- Work hours: A typical work week consists of 40 hours with an 8-hour work day.
- Break: A break of at least 15 minutes is to be provided for 6 consecutive hours of work.
- Overtime: Employees can work for a maximum of 48 hours a week. Overtime pay is calculated as 150% of the normal wage for working above the 40-hour-per-week limit.
Leaves
Sick Leave
Employees are entitled to up to 156 days of sick leave.
Annual Leaves
Around 24 days of paid annual leave is granted to employees who have worked for at least one year.
Public Holidays (for the Calendar year 2023)
The following are the public holidays for the calendar year 2023.
- New Year's Day (1 January)
- Feast of St. Paul's Shipwreck (10 February)
- Feast of St. Joseph (19 March)
- Freedom Day (31 March)
- Good Friday (7 April)
- Worker's Day (1 May)
- Sette Giugno (7 June)
- Feast of St. Peter and St. Paul (29 June)
- Feast of the Assumption (15 August)
- Feast of Our Lady of Victories (8 September)
- Independence Day (21 September)
- Feast of the Immaculate Conception (8 December)
- Republic Day (13 December)
- Christmas Day (25 December)
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Taxes for Employers
Employers are required to contribute 10% of the employee's gross salary towards social security in Malta.
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Taxes for Employees
Income tax:
The following are the tax brackets (for single residents or couples filing taxes separately) in Malta -
- Up to EUR 9,100 - 0%
- EUR 9,101 to EUR 14,500 - 15%
- EUR 14,501 to EUR 19,500 - 25%
- EUR 19,501 to EUR 60,000 - 25% (cap is higher)
- Above 60,000 - 35%
Social tax:
Employees are required to contribute 10% of their gross salary towards social security in Malta.
Probation
- The probation period can be for 6 to 12 months. Shorter periods can be negotiated in the agreements.
- For executive positions, the probation period is for one year.
- The probation period depends on the duration of the contract of employment.
- less than one month - one-third of the duration of the contract period
- 6-month period - 2 months
- 7-month period - 2 months
- 8-month period - 3 months
- 9-month period - 3 months
- 10-month period - 3 months
- 11-month period - 4 months
- 12-month period - 4 months
- 13-month period - 4 months
- 14-month period - 5 months
- 15-month period - 5 months
- 16-month period - 6 months
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Termination
- Employment contracts can only be terminated for just causes such as -
- Redundancy
- Misconduct
- Retirement
- If requested by the employee, the employer must provide an employment certificate.
- The notice period is -
- None for less than 1 month of service
- 1 week for 1 to 6 months
- 2 weeks for 6 months to 2 years
- 4 weeks for 2 to 4 years
- 8 weeks for 4 to 7 years
- 9 weeks for 7 to 8 years
- 10 weeks for 8 to 9 years
- 11 weeks for 9 to 10 years
- 12 weeks for more than 10 years of service
Severance Pay
There is no mandatory severance pay. It can be decided upon in the employment agreements.
Employees or Contractors
- Employees and contractors are treated as different entities in Malta. Employees accrue payroll taxes and are entitled to social security benefits. Contractors do not enjoy these benefits.
- Misclassification of the two would lead to fines being imposed on the employer.
Final Words
The strategic location of Malta makes it an important business and trade destination. The country's friendly norms and abundant local skilled workforce make it a lucrative business destination. EOR services handle employee payroll, benefits, taxes, etc. allowing employers the time to focus on their business goals.
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