Hiring in Malta: The Complete Guide for International Employers

Malta stands out as a premier destination for international hiring, thanks to its robust legal framework, business-friendly environment, and highly skilled, multilingual workforce. 

As a member of the European Union, Malta offers seamless access to the EU market, making it an attractive hub for companies looking to expand globally. The island nation’s strategic location in the Mediterranean, advanced digital infrastructure, and competitive tax incentives further enhance its appeal for foreign businesses. 

Whether you’re seeking tech talent, finance professionals, or customer support teams, Malta’s diverse talent pool and modern regulatory environment provide a solid foundation for sustainable growth.

Foreign companies benefit from Malta’s stable economic climate, transparent labor regulations, and efficient processes for onboarding both EU and non-EU talent. The country’s commitment to innovation, coupled with a high quality of life and strong English proficiency, ensures that international employers can attract and retain top-tier professionals. 

With clear pathways for work permits, streamlined payroll systems, and a culture that embraces remote and flexible work, Malta is an ideal launchpad for global teams.

How to Hire Employees in Malta

Assess Your Hiring Needs

Before you begin, clarify your business objectives and workforce requirements:

• Full-time vs. Project-Based Support: Decide if you need permanent employees for ongoing operations or contractors for specific projects. Malta’s flexible contract types support both models.
• Local Compliance Requirements: Maltese law mandates written employment contracts, adherence to minimum wage, and statutory benefits. Ensure your hiring plan aligns with these rules.
• Onboarding Speed vs. Long-Term Control: If you need to hire quickly, consider options that minimize setup time. For greater control and long-term investment, a local entity may be preferable.

Hiring Options in Malta

You have two main approaches to hiring in Malta:

• Set Up a Legal Entity: Establishing a subsidiary or branch gives you full control over hiring and operations but requires significant time, investment, and ongoing compliance management.
• Partner with an Employer of Record (EOR): An EOR acts as the legal employer, handling payroll, contracts, benefits, and compliance on your behalf. This is ideal for rapid market entry and minimizing administrative burdens.

EOR vs. Legal Entity: Side-by-Side Comparison

Feature	Employer of Record (EOR)	Legal Entity Setup
Setup Time	Days to weeks	Several months
Upfront Cost	Low	High (legal, registration, admin)
Compliance Management	Handled by EOR	Your responsibility
Payroll & Benefits	Managed by EOR	Managed internally
Local HR Expertise	Provided by EOR	Must be developed in-house
Long-Term Control	Limited	Full
Ideal For	Fast entry, testing market, flexibility	Long-term investment, large teams

Ready to simplify hiring in Malta? Learn how Tarmack’s EOR platform can help you expand globally—without the hassle.

Understanding Worker Classification

Employees vs. Contractors in Malta

Correct classification is essential for compliance and cost management. Here’s how the two differ:

Aspect	Employee	Contractor
Legal Status	On company payroll	Self-employed/independent
Control	Employer directs work	Contractor controls work process
Benefits	Statutory benefits apply	No statutory benefits
Tax & Social Security	Employer withholds & pays	Contractor handles own taxes
Termination	Notice and protections	Based on contract terms

Legal Implications and Risks of Misclassification

Misclassifying employees as contractors can result in:

• Fines and penalties from Maltese authorities.
• Back payments for taxes, social security, and benefits.
• Legal disputes and reputational damage.
• Restrictions on future hiring, especially for Third-Country Nationals (TCNs).

Malta’s laws require careful documentation and adherence to employment definitions. Always review contracts and consult local experts to avoid costly mistakes.

Hiring Costs and Payroll

Hiring Costs Overview

When hiring in Malta, consider:

• Salaries: Must meet or exceed the national minimum wage.
• Social Security Contributions: Both employer and employee contribute a percentage of salary.
• Recruitment and Onboarding: Costs include advertising, interviews, and training.
• Work Permits and Visas: Fees apply for non-EU hires (e.g., €600 for first-time Single Permits).
• Benefits: Statutory leave, health insurance, and optional perks.

For a deeper dive into total employment costs, read this guide on understanding employee cost calculations.

Payroll Setup Steps

1. Register as Employer: If setting up a local entity, register with Maltese authorities.
2. Collect Employee Data: Obtain tax, banking, and social security details.
3. Draft Contracts: Issue written employment contracts within eight days of starting work.
4. Set Up Payroll System: Ensure accurate calculations for salary, taxes, and contributions.
5. Report and Remit: Submit payroll reports and remit taxes/social security as required.

Income Tax Rates

• Progressive Tax System: Ranges from 0% to 35% based on income level.
• Residents: Taxed on worldwide income.
• Non-Residents: Taxed only on Malta-sourced income.
• Special Schemes: Highly Qualified Individuals may benefit from flat 15% tax rates.

Payment Methods

• Direct Deposit: Standard for most employees.
• Bank Transfers: Required for all TCN salaries from October 2025.
• EOR Payroll: EORs handle all payments, deductions, and reporting on your behalf.

Using Global Payroll Services

A global payroll provider like Tarmack streamlines:

• Multi-currency payments.
• Local tax and compliance management.
• Automated reporting and record keeping.
• Integration with HR and accounting systems.

For more details on global payroll solutions, read how EOR services can ease payroll and benefits management.

How to Properly Hire and Pay Contractors

• Written Agreement: Clearly define scope, deliverables, and payment terms.
• Tax Compliance: Contractors must handle their own taxes; ensure you do not withhold unless required.
• Payment Methods: Use secure transfers; avoid cash payments.
• Classification Review: Regularly review contractor status to avoid misclassification.

Check out the tips for paying international contractors.

Compliance Risks

Incorrect Payroll Contributions

Failure to remit correct social security or tax payments can lead to:

• Fines and penalties.
• Suspension of hiring rights for TCNs.
• Back payments and interest charges.

Permanent Establishment Risk

Hiring directly without a legal entity may trigger “permanent establishment” status, exposing your company to local corporate taxes and regulatory scrutiny. EORs help mitigate this risk by acting as the legal employer.

Learn about the compliance challenges when establishing an overseas entity.

Statutory Benefits

Employers must provide:

• Minimum paid leave (24 days/year).
• Sick leave, maternity/paternity leave.
• Social security and pension contributions.
• Health and safety protections.

Failure to comply can result in employee claims and government penalties.

Misclassification Risks

Improperly classifying workers can result in:

• Reclassification by authorities.
• Retroactive benefits and tax liabilities.
• Legal disputes and hiring restrictions.

Check out W-2 and 1099 forms: differences and classification regulations.

Provincial/Regional Law Variances

Malta is a unitary state; employment laws are consistent nationwide, reducing regional compliance complexity.

Overview of Intellectual Property Rights for Employers

Key IP rights in Malta include:

• Copyright: Protects creative works produced by employees.
• Patents and Trademarks: Belong to the employer if developed during employment.
• Confidentiality: NDAs and contract clauses safeguard business information.

Employers should ensure contracts clearly assign IP developed during employment to the company. 

Learn about managing IP through EOR arrangements.

Onboarding Process

Before Their First Day

• Documentation: Collect personal details, tax info, and banking details.
• Work Permits: Secure necessary permits for non-EU hires.
• Contract Issuance: Provide written contract outlining all terms.
• Equipment and Access: Arrange for laptops, software, and office access.

On Day 1

• Orientation: Introduce company culture, mission, and team.
• Compliance Briefing: Review workplace safety, anti-discrimination, and confidentiality policies.
• Paperwork: Finalize any outstanding forms or declarations.

During Their First 90 Days

• Training: Provide job-specific training and resources.
• Mentorship: Assign a mentor or buddy for support.
• Feedback: Schedule regular check-ins to address questions and performance.

Offer Letter Essentials

• Role and Responsibilities
• Salary and Benefits
• Working Hours
• Probation Period (if any)
• Termination and Notice Terms
• IP and Confidentiality Clauses

NDAs and Confidentiality

• Include robust NDAs in contracts.
• Clearly define what constitutes confidential information.
• Outline consequences for breaches.

Running Background Checks

• Obtain candidate consent.
• Verify previous employment and qualifications.
• Conduct criminal and reference checks as permitted by law.

Check out the top onboarding practices for international employees.

Remote Employee Management

Managing remote teams in Malta requires structure and security:

• Computer and App Access: Provide secure devices and access to necessary platforms. Use VPNs and multi-factor authentication.
• IP Protection: Ensure employment contracts assign IP ownership to your company. Use NDAs and secure data storage.
• Performance Management: Set clear goals, regular check-ins, and transparent communication channels.
• Cultural Integration: Foster inclusion with virtual team-building and regular feedback.

For actionable remote management strategies, read how to manage employees remotely and globally and building positive remote work culture.

Labor Law Compliance

Key Working Condition Requirements

• Working Hours: Maximums set by law; overtime requires additional pay.
• Leave: 24 days paid annual leave, plus public holidays.
• Sick, Maternity, and Paternity Leave: Statutory entitlements apply.
• Health and Safety: Employers must provide a safe workplace.

Working Conditions by Employment Type

• Full-Time: Standard benefits and protections.
• Part-Time/Temporary: Pro-rated benefits; must comply with core labor standards.
• Contractors: No statutory benefits, but must be properly classified.

No At-Will Employment

Malta does not allow at-will termination. Dismissals must be for just cause and follow due process.

Trade Unions and Collective Bargaining

Employees may join trade unions. Collective agreements may set additional terms beyond statutory minimums.

For more on compliance, check out employment compliance and its importance.

Termination Guidelines

Acceptable Termination Reasons

Termination must be based on:

• Redundancy (genuine business need).
• Incapacity or poor performance (with documented process).
• Serious misconduct (after fair investigation).
• End of fixed-term contract.

Unfair dismissal is prohibited, and employees have the right to challenge terminations through legal channels.

Notice Periods and Legal Protections

• Notice Periods: Vary by length of service; must be specified in the contract.
• Process: Employers must provide written notice or pay in lieu.
• Severance: May apply in redundancy cases.
• Appeals: Employees can appeal dismissals; employers should maintain thorough documentation.

Check out the suggested script for terminating employees professionally and severance regulations across countries.

Benefits of Hiring in Malta

• Skilled, Multilingual Talent Pool: High English proficiency and diverse language skills.
• Cost Efficiency: Competitive salaries and moderate employment costs.
• Time Zone Benefits: Aligns well with both European and Middle Eastern markets.
• Business-Friendly Environment: Transparent regulations and strong IP protections.
• Modern Infrastructure: Advanced digital connectivity and supportive government policies.
• Flexible Work Culture: Embraces remote and hybrid work models.

hiring employees in Malta
Made Simple: Fast, Compliant Hiring for Global Employers

Malta offers a compelling environment for international employers—combining a skilled workforce, robust legal protections, and efficient compliance processes. 

Whether you choose to set up a local entity or leverage an Employer of Record, Malta’s regulatory clarity and business infrastructure make it an ideal launchpad for global growth. By understanding local requirements and leveraging expert support, you can confidently build and scale your team in this dynamic market.

Ready to hire in Malta? Discover how Tarmack streamlines global payroll and compliance for enterprise growth.

• For additional insights on global hiring, check out this guide on choosing the right EOR partner and top reasons to consider an EOR.
• Looking for more details on employment law in Europe? See this EURES summary of working conditions in Portugal and Expatica’s overview of Portuguese labor law for comparison.