Malta PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Malta to companies willing to enter the Malta market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Malta.  However our solution allows you to start the operations in Malta within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Malta fast facts

Population, million: 0,51

Land area, sq. km: 316 km2

Capital: Valletta

Local currency: EUR

Hiring, Negotiating and Doing Business in Malta

Necessity of written employment contract

The employment contract in Malta can be signed for fixed or unlimited period of time and the job can be full-time or part-time. In Malta the usual probation time is 6 months unless specified otherwise. During the trial period any of the parties can conclude the employment without a reason, but in this case a week’s notice must be given.

The contract must contain data about the salary, payment for overtime work, the program (number of hours per day, per week), where the work takes place and the time off the worker is entitled to. The salary must be paid at regular time spans that will not exceed 4 weeks.

Malta Employment Contract

Types of employment agreements

Contracts signed for a determined period of time can be renewed yearly. However, starting the 4th year of employment, the employee will be working based on indefinite time work contract.

One of the most important provisions of the Maltese Labor Code refers to the type of workers and employment contracts they can enter. Individuals are categorized as employees or self-employed personnel. When it comes to employees, the legislation refers to several categories of workers, among which:

•  employees of companies;
• workers in various agencies;
• contract staff;
• self-employed personnel who depend on a specific employer.

Malta working hours

Working hours for a full time position in Malta are usually 40/week, but according to the law, 48 hours per week is the maximum limit admitted. The additional eight hours will be considered overtime and must be paid accordingly.

Vacation leave in Malta

Maltese employees are entitled to 24 days of annual leave, according to the law, and public holidays are also days off throughout the year. Malta has about 14 public holidays. Employees aged between 16 and 18 will benefit from reduced working hours, according to the Maltese legislation. They cannot exceed an 8-hour schedule and 40 hours per week.

Sick leave: 

When an employee is in employment for less than 12 months the employee shall only be entitled to sick leave in proportion to the period in employment. Sick leave shall be granted to the employee ONLY when an employee presents a medical certificate certifying incapacity for work.  A medical certificate covering the period of absence is to be produced to the employer on the day of return to work or, if such period of absence is longer than seven days within seven days of the onset of sick leave absence.  The employer shall have the right to send a medical practitioner to visit and examine an employee who is on sick leave.

Full-Time Employees

Entitlement per calendar year:

• 2 working weeks (calculated in hours) sick leave on full pay less sickness benefit.
• The first 3 days of any claim for sick leave shall be paid by the employer.
• Persons in receipt of a social security pension in respect of retirement or widowhood in terms of the Social Security Act shall, for the purpose of calculating the sick leave pay due, be deemed to have received an amount equal to the sum set for sickness benefit entitlement at the rate established under the Social Security Act.

Part-Time Employees

Part-Time employees working less than 40 hours a week, are entitled to a pro rata leave calculation of the Full-Time employees’ leave entitlement.  This is calculated by establishing the weekly number of hours of work based on the average number of hours of work spread over successive 13 week periods, commencing on the 1st January of each calendar year.  Part-time employees who have not been in employment for a period of 13 weeks the average weekly number of hours of work shall be calculated over the number of weeks in employment.

Malta Maternity Leave

One unique aspect of Malta’s benefits laws is that both male and female workers can get unpaid parental leave for four months for a birth, adoption, foster child, or legal custody of a child until the child turns eight. However, all employees need to work for your company for at least a year for eligibility. 

Malta Severance Laws

In case of ending a contract signed on a limited period of time, the party ending the agreement before the term must pay half of the gaining the employee would have made in the time remaining until the end of the contract.

In case of dismissal, the Maltese law is very strict. The Maltese company can end a contract only if there is a good cause, in case of redundancy and if the employee has achieved the retirement age.

The employee can end the agreement without presenting any reason.

In Malta, at the end of a contract that has been signed on unlimited period of time, the notice is calculated as it follows:

• for periods from 1 to 6 months, the notice will be one week;
• for periods between 6 months and 2 years, the notice will be two weeks;
• for periods between 2 and 4 years – four weeks;
• for periods between 4 and 7 years – eight weeks;
• for periods exceeding 7 years, the maximum notice to be given is 12 weeks.

Special treatment and protection, in case of termination, is offered to injured people and women in maternity leave. 

Reasons to terminate employment in Malta

According to the Malta Employment Act, an employer does not require a specific reason to dismiss employees. However, employment cannot be ended during the maternity leave for women. Upon dismissal, the Maltese company must give notice to the employee. The notice period begins the second day the employee was announced.

The same conditions apply when it comes to fixed-term employment contracts in Malta. However, any of the parties ending the contract before it expires is bound to pay a remuneration to the other party.

Malta Tax

Income is taxable at graduated progressive rates, ranging from 0% to 35%. For year of assessment 2020 (year of income 2019), in the case of single individuals (including married individuals opting for separate computation) there is a tax liability of EUR 12,275 on the first EUR 60,000 of income (individuals earning up to EUR 19,500 should save up to EUR 90 tax per annum).

Married individuals should be liable for EUR 11,095 tax on the first EUR 60,000 of income (couples earning up to EUR 28,700 should save up to EUR 120 tax per annum). For amounts exceeding these thresholds, the tax rate is 35% for both single and married individuals. Subject to certain conditions, the married rates also apply to single parents, widows/widowers, and separated parents.

Social security contributions

Both the employer and the employee are each required to pay social security contributions at the rate of 10% of the individual employee’s salary and at fixed rates of EUR 48.05 per week for annual salaries exceeding EUR 24,986, provided the employee was born on or after 1 January 1962.

For self-occupied/self-employed individuals, social security contributions amount to 15% of the annual net income earned during the previous year. The maximum contribution for persons born on or after 1 January 1962 amounts to EUR 72.08.

Additional Benefits in Malta

Wages are paid in cash or by cheque that can be cashed at Maltese banks. Salaries are paid on regular basis by companies in Malta and the employer and employee may agree on the period the salary is paid. The employer may not impose any conditions about the payment of the salary and may not withhold any amount except from the wage taxes the state requires.

Malta Holidays

• New Year’s Day
• Feast of Saint Paul’s Shipwreck
• Feast of Saint Joseph
• Good Friday
• Freedom Day
• Labour Day/May Day
• Sette Giugno
• Feast of Saints Peter and Paul
• The Feast of Mary’s Assumption
• The Feast of Our Lady of Victories
• Independence Day
• Feast of the Immaculate Conception
• Republic Day
• Christmas Day

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.