Rivermate | Malta flag


499 EUR per employee per month

Discover everything you need to know about Malta

Hire in Malta at a glance

Here ares some key facts regarding hiring in Malta

GDP growth
GDP world share
Payroll frequency
Working hours
40 hours/week

Overview in Malta

Read more

Malta, a densely populated island nation in the Mediterranean, has a rich history influenced by various rulers including the Phoenicians, Romans, and Knights Hospitaller, and was a British colony until its independence in 1964. It joined the EU in 2004. The economy is diverse, driven by sectors such as tourism, financial services, iGaming, and manufacturing. The workforce is highly educated, with a significant portion in the service sector. Malta's strategic location is a key economic asset, enhancing its roles in shipping and as a Mediterranean transshipment hub.

The Maltese culture values family and work-life balance, with a workplace environment that emphasizes personal relationships and direct communication. Organizational hierarchies in Malta respect age and experience but are less rigid than in more hierarchical cultures. The economy benefits from being an EU member and is bolstered by sectors like tourism, which has rebounded strongly post-pandemic, and financial services, which thrive due to favorable tax policies and regulatory frameworks.

Emerging sectors such as blockchain and medical tourism show potential for growth, reflecting Malta's adaptability and strategic initiatives to diversify its economic base. Malta's interconnected economic sectors demonstrate how growth in one area can stimulate demand across others, such as real estate and professional services.

Rivermate | bulb icon

Get a payroll calculation for Malta

Understand what the employment costs are that you have to consider when hiring Malta

Employer of Record in Malta

Rivermate is a global Employer of Record company that helps you hire employees in Malta without the need to set up a legal entity. We act as the Employer of Record for your employees in Malta, taking care of all the legal and compliance aspects of employment, so you can focus on growing your business.

How does it work?

When you hire employees in Malta through Rivermate, we become the legal employer of your staff. This means that we take on all the responsibilities of an employer, while you retain the day-to-day management of your employees.

You as the company maintain the direct relationshiop with the employee, you allocate them the work and manage their performance.
Rivermate takes care of the local payrolling of the employee, the contracts, HR, benefits and compliance.

Responsibilities of an Employer of Record

As an Employer of Record in Malta, Rivermate is responsible for:

  • Creating and managing the employment contracts
  • Running the monthly payroll
  • Providing local and global benefits
  • Ensuring 100% local compliance
  • Providing local HR support

Responsibilities of the company that hires the employee

As the company that hires the employee through the Employer of Record, you are responsible for:

  • Day-to-day management of the employee
  • Work assignments
  • Performance management
  • Training and development

Taxes in Malta

Read more
  • Employer Tax Responsibilities in Malta: Employers in Malta are required to contribute to the social security system at a rate of 10% of the employee's gross salary, matching the employee's contribution. They also contribute 0.3% to the Maternity Fund and are responsible for paying an annual government-determined bonus.

  • Administration of Contributions: Employers must handle the deduction and remittance of both their contributions and the employees' contributions to the Inland Revenue Department, typically on a monthly basis.

  • Employee Tax Deductions: Employees in Malta are subject to income tax deducted by their employer under the Pay-As-You-Earn (PAYE) system, and social security contributions. Additional deductions may include expenses directly related to employment income and alimony payments.

  • VAT Responsibilities: Businesses in Malta must register for VAT if their annual taxable supplies exceed €35,000, with a standard VAT rate of 18%. Certain goods and services have reduced rates or are VAT-exempt. VAT returns are generally filed quarterly.

  • Tax Incentives and Benefits: Malta offers various tax incentives including Investment Aid Tax Credits and the Micro Invest Scheme. The country also has a favorable tax regime for corporate shareholders and a wide network of double taxation treaties to prevent double taxation on international income.

  • Special VAT Regimes and Industry-Specific Incentives: The Tour Operators Margin Scheme simplifies VAT for tour operators, and there are specific incentives for R&D, film, television, and the iGaming sector.

Leave in Malta

Read more
  • Annual Leave: Full-time employees working a 40-hour week are entitled to 192 hours (four working weeks and four days) of paid annual leave. Up to 50% of this leave can be carried over to the next year with employer agreement.

  • Compensation for Unused Leave: At least 160 hours of leave must be taken annually; financial compensation for unused leave is only allowed upon employment termination.

  • Part-Time Employees: Vacation leave for part-time employees is calculated proportionally based on their working hours.

  • Public Holidays in Malta: Malta recognizes 14 annual public holidays, categorized into National Holidays (such as Freedom Day and Independence Day) and Religious Holidays (including New Year's Day and Christmas Day).

  • Sick Leave: Employees are eligible for paid sick leave after a probationary period, with the amount determined by their employment contract or collective agreements.

  • Injury Leave: Employees injured on the job are entitled to one year of paid injury leave, followed by one year at half-pay.

  • Maternity and Paternity Leave: Expectant mothers receive 18 weeks of paid maternity leave, while fathers are entitled to 10 working days of paid paternity leave.

  • Bereavement and Urgent Family Leave: Employees receive up to 3 days of paid leave for the death of close family members and 15 hours of paid leave per year for urgent family matters.

  • Other Types of Leave: Includes marriage leave, carers' leave, study leave, and foster care leave, with specific entitlements varying by employment contract.

Benefits in Malta

Read more

Malta provides a robust employee benefits system, including mandatory and optional perks to enhance workers' financial security and well-being. Key mandatory benefits include:

  • Paid Leave: Employees are entitled to 28 days of annual leave, 10 days of sick leave, and paid leave on 14 public holidays.
  • Parental Leave: 18 weeks of maternity leave and two weeks of paternity leave are provided.
  • Other Benefits: These include probationary periods, notice periods, severance pay, overtime pay, and social security contributions.

Optional benefits offered by many companies in Malta include:

  • Health and Wellness: Private health insurance and wellness programs.
  • Work-Life Balance: Flexible work arrangements and additional paid leave.
  • Financial and Professional Development: Performance bonuses, profit sharing, and training opportunities.
  • Lifestyle and Leisure: Company discounts and on-site amenities.

Healthcare in Malta operates on a two-tier system with public and private sectors. EU/EEA citizens and Maltese nationals have broad coverage under the National Health Service (NHS), while non-EU/EEA citizens need employer-provided insurance or private contributions to access NHS services.

Retirement planning in Malta includes a mandatory state pension scheme supplemented by voluntary private pension plans, offering tax benefits and various investment options to enhance retirement savings.

Workers Rights in Malta

Read more

Malta's employment laws encompass a robust framework for the termination of employment, anti-discrimination measures, and workplace health and safety regulations.

Termination of Employment:

  • Lawful Grounds for Dismissal: Includes serious misconduct, redundancy, and underperformance, with specific procedures and severance pay for eligible employees.
  • Notice Requirements: Vary by length of employment and contractual terms, with specific guidelines for probationary periods and beyond.

Anti-Discrimination Laws:

  • Key Legislation: Includes the Constitution of Malta, Equality for Men and Women Act, and the Gender Identity, Gender Expression, and Sex Characteristics Act.
  • Protected Characteristics: Cover a wide range including sex, gender identity, race, age, and disability.
  • Redress Mechanisms: Complaints can be filed with the National Commission for the Promotion of Equality, Industrial Tribunal, or Civil Courts.
  • Employer Responsibilities: Include developing non-discrimination policies, ensuring bias-free hiring, and providing reasonable accommodations.

Workplace Health and Safety:

  • Regulations: Governed by the Occupational Health and Safety Authority Act, focusing on risk assessments, safe work practices, and employee training.
  • Employer Obligations: Include providing a safe work environment, necessary personal protective equipment, and maintaining regular safety training.
  • Employee Rights: Employees are entitled to a safe workplace, necessary safety information and training, and the right to refuse unsafe work.
  • Enforcement: The Occupational Health and Safety Authority oversees compliance, conducts inspections, and enforces regulations.

These comprehensive laws and regulations ensure that employees in Malta are treated fairly, work in safe conditions, and have mechanisms to address grievances related to employment and discrimination.

Agreements in Malta

Read more

Malta's employment law offers various contractual frameworks to accommodate the needs of employers and employees, including full-time, part-time, and temporary agency work contracts. The most prevalent are indefinite contracts, which have no set end date, and fixed-term contracts, which are limited to a maximum of four years and can automatically convert to indefinite contracts under certain conditions. Employment agreements should clearly outline core details such as job responsibilities, compensation, benefits, working hours, and leave entitlements. Termination conditions must also be specified, adhering to legal requirements.

The probationary period is a crucial initial phase, typically six months for indefinite contracts, allowing both parties to assess suitability. For specific high-paying positions, this period can extend up to one year. During probation, employment can be terminated with a week's notice after the first month.

Confidentiality and non-compete clauses are important for protecting sensitive business information and maintaining fair competition. These clauses must be reasonable in scope, duration, and geographic reach to be enforceable under Maltese law. Employers are advised to consult legal professionals to ensure their contracts comply with local employment laws and best practices.

Remote Work in Malta

Read more

Malta has embraced remote work, adapting its legal and technological frameworks to support this modern work practice. The country's legislation, including the Employment Conditions Act, provides rights such as the "right to disconnect" and guidelines for public sector remote work. Technological infrastructure is crucial, requiring reliable internet, secure communication platforms, and remote access tools. Employers are responsible for ensuring a safe work environment, providing necessary equipment, and managing communication and collaboration effectively.

Additionally, Malta supports flexible work arrangements like part-time work, flexitime, and job sharing, although specific laws for flexitime and job sharing are not in place. The Employment Conditions Regulations (ECR), 2007, outlines standards for part-time work, including benefits proportional to those of full-time employees.

Regarding data protection, the General Data Protection Regulation (GDPR) mandates employers to protect employee data, with employees having rights to access and control their personal information. Best practices for securing data in remote work include using secure devices, VPNs, role-based access controls, and regular data security training.

Working Hours in Malta

Read more

Summary of Malta's Employment Regulations on Working Hours and Overtime

  • Standard Working Week: Malta's Employment Act sets the standard working week at 40 hours for full-time employees.
  • Maximum Working Hours: According to the Organisation of Working Time Regulations, the average working time cannot exceed 48 hours per week over a 17-week period, unless with written employee consent.
  • Overtime: Employees are entitled to overtime pay for hours worked beyond the standard 40-hour week. The rate is one and a half times the normal rate unless a specific Wage Regulation Order (WRO) applies.
  • Rest Periods: Employees must receive a minimum of 11 consecutive hours of daily rest and a 24-hour uninterrupted weekly rest period. Work periods over six hours require a rest break of at least 20 minutes.
  • Night and Weekend Work: Night workers, defined as those working significant hours between 10 p.m. and 6 a.m., must not exceed an average of eight hours of work within a 24-hour period over 17 weeks. Weekend work regulations may be specified by industry-specific WROs.
  • Health Assessments: Night workers are required to undergo pre-employment health assessments and regular check-ups thereafter.

These regulations aim to balance work commitments with employee health and well-being, ensuring fair compensation and adequate rest.

Salary in Malta

Read more

Understanding competitive salaries in Malta is essential for attracting and retaining talent. Factors influencing salary competitiveness include industry, job role, experience, qualifications, and location. Research methods such as salary surveys, job boards, and benchmarking tools help determine appropriate pay scales.

The national minimum wage in Malta is set annually and varies by age, with specific rates for adults, 17-year-olds, and those under 17. Sector-specific minimum wages may also apply, set through Wage Regulation Orders.

Additional financial benefits for Maltese employees include statutory bonuses paid bi-annually, statutory weekly allowances, and various employer-specific benefits like health insurance, pension contributions, and performance bonuses. Payroll practices in Malta emphasize frequency and transparency, with employers providing detailed payslips and maintaining clear payment schedules.

Termination in Malta

Read more

In Malta, the Employment Relations Act governs the notice periods required for employment termination, which vary based on the duration of an employee's service. For instance, employees with less than a month of service require no notice, while those with more than four years require eight weeks' notice. During probation, no notice is needed if employment lasts less than a month, but a one-week notice is required if the duration exceeds a month.

Exceptions to these notice periods include immediate termination for serious misconduct and the natural conclusion of fixed-term contracts without a notice, unless during probation where a one-week notice may apply if service exceeds one month. Severance pay is generally not mandatory, except under specific conditions such as early termination of fixed-term contracts or redundancy due to employer insolvency, where employees may claim from the Wage Guarantee Fund.

For indefinite contracts, termination can occur at will but must adhere to notice periods unless there is serious misconduct. Fixed-term contracts naturally end on their expiry date, but if terminated early, employers must pay half the wages for the remaining period. Unfair dismissal claims can be addressed by the Industrial Tribunal, which may offer remedies like reinstatement or compensation. Formal termination letters and full payment of all dues upon termination are recommended best practices.

Freelancing in Malta

Read more

In Malta, the classification between employees and independent contractors is crucial, affecting rights, benefits, and tax duties. Employees operate under employer control, are integrated into the company, and depend economically on their employer. Independent contractors manage their work autonomously, maintain independence from company structures, and handle their own business finances.

Contract options for independent contractors include definite contracts for fixed terms and service agreements for ongoing work. Negotiations in Malta emphasize patience and mutual benefits, with a preference for written contracts to avoid misunderstandings.

Key industries for independent contractors in Malta include IT, tourism, and professional services. Intellectual property rights are generally retained by the creator unless otherwise specified in a contract, and moral rights remain with the freelancer.

Freelancers must register for taxes if earning over €9,000 annually, file tax returns, and may need to make provisional tax payments. They can opt into Malta's social security for benefits and should consider insurance options like health, professional indemnity, and public liability insurance to mitigate potential risks.

Health & Safety in Malta

Read more

The Occupational Health and Safety Authority Act (Chapter 424 of the Laws of Malta) is the primary legislation governing workplace health and safety in Malta. It sets out responsibilities for both employers and employees to ensure a safe working environment.

Employer Responsibilities:

  • General Duties: Ensure the health, safety, and welfare of employees by providing safe workplaces, equipment, and systems of work.
  • Risk Assessments: Identify hazards, conduct risk assessments, and implement control measures.
  • Consultation and Cooperation: Consult with employees on health and safety matters.
  • Provision of Information and Training: Provide adequate health and safety training and information.

Employee Responsibilities:

  • Taking Reasonable Care: Employees must take care of their own health and safety and that of others.
  • Cooperating with Employers: Comply with health and safety requirements.
  • Using Equipment and PPE Correctly: Properly use machinery, equipment, and safety devices provided.

Specific Regulations:

  • Various subsidiary legislative instruments address specific workplace health and safety aspects, including regulations for construction, ionizing radiation, and major accident hazards.

Key Aspects of Malta's OHS Approach:

  • Risk Assessment: A fundamental aspect, requiring employers to identify and assess workplace hazards.
  • Prevention and Control Measures: Follows a hierarchy of controls from elimination to personal protective equipment.
  • Consultation and Worker Participation: Involvement of employees in decision-making processes.
  • Training and Information: Provision of job-specific OHS training and clear safety information.
  • Emergency Planning and Preparedness: Requires emergency plans and regular drills.

Role of the Occupational Health and Safety Authority (OHSA):

  • OHSA enforces compliance through workplace inspections, can issue notices for improvements, and provides resources and support for employers and workers.

Workplace Inspections:

  • Inspections are conducted without prior notice, focusing on compliance, risk assessments, and known hazards. Frequency depends on the risk level of the workplace.

Actions Following Inspections:

  • Actions can range from verbal advice to issuing legal notices for compliance and, in severe cases, prosecution.

Workplace Accident Reporting and Investigation:

  • Employers must report accidents, and the OHSA investigates serious incidents to identify causes and recommend preventive measures.

Compensation Claims:

  • The social security system provides benefits for workplace injuries, and employees can file civil lawsuits in cases of employer negligence.

Dispute Resolution in Malta

Read more

Malta's labor dispute resolution and compliance mechanisms are structured around the Industrial Tribunal and the Department of Industrial and Employment Relations (DIER). The Industrial Tribunal primarily handles individual and some collective labor disputes, offering conciliation services and formal hearings, with decisions subject to appeal on points of law. Arbitration is another avenue, used voluntarily for resolving labor disputes, particularly collective ones, with arbitrators issuing binding decisions.

Key legal frameworks include the Employment and Industrial Relations Act, the Constitution of Malta, and the Code of Organization and Civil Procedure, which guide labor standards enforcement and dispute resolution. The DIER conducts various types of labor inspections, such as scheduled, complaint-triggered, targeted, and follow-up inspections, to ensure compliance with labor laws. Non-compliance can lead to warnings, fines, prosecution, or public disclosure of the offending company's name.

Whistleblower protections in Malta are outlined in the Protection of the Whistleblower Act (2013), which safeguards individuals reporting labor violations in good faith, although practical enforcement challenges exist. Enhancements to whistleblower protections could include awareness campaigns and secure reporting mechanisms.

Malta has ratified several core International Labour Organization (ILO) conventions, reflecting its commitment to international labor standards. These conventions influence Malta's domestic legislation, ensuring protections against forced labor, child labor, discrimination, and supporting the right to organize and collective bargaining. Malta's ongoing efforts focus on aligning its laws and practices with ILO and EU standards, addressing gaps, and building stakeholder capacity to uphold labor rights.

Cultural Considerations in Malta

Read more
  • Communication Styles in Malta: Maltese communication is influenced by British and Mediterranean cultures, blending directness and indirectness based on the relationship and situation. Formality is common in initial business interactions, using titles and polite greetings, with a shift to casualness as relationships develop. Non-verbal cues like expressive body language and eye contact are significant, but cultural interpretations must be considered.

  • Business Practices and Negotiation: Business meetings in Malta often start with social conversation and can be lengthy. Decision-making is centralized, though input from team members is valued. Negotiations focus on building relationships and trust, using a mix of direct and respectful communication. Facts and logical arguments are persuasive in negotiations.

  • Cultural Norms and Structures: Politeness and maintaining professional demeanor are crucial. Maltese businesses typically have mid-range hierarchical structures, balancing authority with employee participation. Leadership is authoritative but includes justification to foster understanding. Hofstede's Power Distance index and contingency theory help explain the effectiveness of these structures.

  • Statutory Holidays and Impact on Business: Key public holidays like New Year's Day, Feast of St. Joseph, Freedom Day, Immaculate Conception, and Christmas Day significantly affect business operations, with most businesses closing. Village feasts and Carnival can also alter business hours. Awareness of these holidays is essential for planning business activities in Malta.

Frequently Asked Questions for Employer of Record services in Malta

Who handles the filing and payment of employees' taxes and social insurance contributions when using an Employer of Record in Malta?

When using an Employer of Record (EOR) in Malta, the EOR handles the filing and payment of employees' taxes and social insurance contributions. This includes the calculation, withholding, and remittance of income tax to the Maltese Inland Revenue Department, as well as the payment of social security contributions to the Department of Social Security. The EOR ensures compliance with local tax laws and regulations, thereby relieving the client company of the administrative burden and complexities associated with Maltese payroll and tax compliance.

Is it possible to hire independent contractors in Malta?

Yes, it is possible to hire independent contractors in Malta. However, there are several important considerations to keep in mind when doing so:

  1. Legal Classification: In Malta, the distinction between an employee and an independent contractor is crucial. Independent contractors are typically self-employed individuals who provide services to a company under a contract for services. They are not subject to the same employment laws and protections as employees.

  2. Contractual Agreement: It is essential to have a clear and comprehensive contract that outlines the scope of work, payment terms, duration, and other relevant conditions. This contract should explicitly state that the individual is being hired as an independent contractor and not as an employee.

  3. Tax Implications: Independent contractors in Malta are responsible for their own tax filings and social security contributions. They must register with the Maltese tax authorities and ensure compliance with local tax laws. Companies hiring independent contractors should be aware of their obligations to report payments made to contractors.

  4. Employment Rights: Independent contractors do not enjoy the same rights and benefits as employees, such as paid leave, sick leave, and protection against unfair dismissal. This distinction must be clearly communicated to avoid any potential legal disputes.

  5. Risk of Misclassification: Misclassifying an employee as an independent contractor can lead to significant legal and financial repercussions. Maltese authorities may reclassify the relationship based on the nature of the work and the level of control exercised by the company over the contractor. If reclassified, the company may be liable for unpaid taxes, social security contributions, and other employee benefits.

  6. Compliance with Local Laws: Companies must ensure that they comply with all relevant Maltese laws and regulations when hiring independent contractors. This includes adhering to health and safety standards, data protection laws, and any industry-specific regulations.

Using an Employer of Record (EOR) service like Rivermate can simplify the process of hiring independent contractors in Malta. An EOR can help ensure compliance with local laws, manage payroll and tax obligations, and mitigate the risks associated with misclassification. This allows companies to focus on their core business activities while ensuring that their contractual relationships are legally sound and properly managed.

What options are available for hiring a worker in Malta?

In Malta, employers have several options for hiring workers, each with its own set of legal and administrative requirements. Here are the primary options available:

  1. Direct Employment:

    • Permanent Contracts: These are open-ended contracts where the employee is hired indefinitely. This type of contract provides job security and benefits such as paid leave, sick leave, and other statutory entitlements.
    • Fixed-Term Contracts: These contracts are for a specific duration and are often used for project-based work or to cover temporary needs. They must comply with Maltese labor laws, including provisions for renewal and termination.
    • Part-Time Contracts: Part-time employees work fewer hours than full-time employees and are entitled to pro-rata benefits. This option is suitable for roles that do not require a full-time commitment.
  2. Temporary Employment:

    • Temporary Agency Work: Employers can hire workers through temporary employment agencies. The agency acts as the employer, handling payroll and compliance, while the worker is assigned to the client company.
    • Seasonal Employment: This is common in industries like tourism and agriculture, where demand fluctuates seasonally. Seasonal workers are hired for a specific period and are entitled to the same rights as other employees.
  3. Freelancers and Independent Contractors:

    • Freelancers: These are self-employed individuals who offer their services to multiple clients. They handle their own taxes and social security contributions. This option provides flexibility but requires careful management to ensure compliance with Maltese labor laws.
    • Independent Contractors: Similar to freelancers, independent contractors work on a project basis. They are not considered employees and do not receive employee benefits. Contracts should clearly define the scope of work and payment terms to avoid misclassification issues.
  4. Employer of Record (EOR) Services:

    • Using an EOR like Rivermate: An EOR can simplify the hiring process by acting as the legal employer on behalf of the client company. This service is particularly beneficial for companies looking to expand into Malta without establishing a local entity. The EOR handles all employment-related tasks, including payroll, tax compliance, benefits administration, and adherence to local labor laws. This allows the client company to focus on business operations while ensuring full compliance with Maltese regulations.

Benefits of Using an Employer of Record in Malta:

  • Compliance: Ensures adherence to Maltese labor laws, including employment contracts, tax obligations, and social security contributions.
  • Cost-Effective: Eliminates the need to set up a local entity, reducing administrative and operational costs.
  • Speed: Accelerates the hiring process, allowing companies to onboard employees quickly and efficiently.
  • Risk Mitigation: Reduces the risk of legal issues related to employment practices, as the EOR assumes responsibility for compliance.
  • Focus on Core Business: Allows companies to concentrate on their core activities while the EOR manages HR and administrative tasks.

In summary, Malta offers various hiring options, each suited to different business needs. Using an Employer of Record like Rivermate can provide significant advantages, particularly for companies looking to expand into Malta without the complexities of establishing a local presence.

What are the costs associated with employing someone in Malta?

Employing someone in Malta involves several costs that employers need to consider. These costs can be broadly categorized into direct and indirect expenses. Here’s a detailed breakdown:

Direct Costs:

  1. Gross Salary:

    • The primary cost is the gross salary agreed upon with the employee. This is the base salary before any deductions for taxes or social security contributions.
  2. Social Security Contributions:

    • Both employers and employees in Malta are required to make social security contributions. As of 2023, the employer's contribution is 10% of the employee's gross salary, while the employee contributes another 10%. There are minimum and maximum thresholds for these contributions, which are updated annually.
  3. Income Tax:

    • While income tax is deducted from the employee's salary, employers must ensure compliance with the tax regulations and facilitate the correct deductions. Malta has a progressive tax system with rates ranging from 0% to 35%, depending on the employee's income bracket.
  4. Mandatory Bonuses:

    • Employers in Malta are required to pay statutory bonuses, which include a statutory bonus and a weekly allowance. These are typically paid in four installments throughout the year (March, June, September, and December).

Indirect Costs:

  1. Recruitment and Onboarding:

    • Costs associated with recruiting and onboarding new employees, including advertising, interviewing, and training expenses.
  2. Compliance and Administration:

    • Ensuring compliance with Maltese labor laws and regulations can incur costs, particularly if legal or consultancy services are required. This includes maintaining proper employment records, contracts, and adhering to health and safety regulations.
  3. Employee Benefits:

    • While not always mandatory, providing additional benefits such as private health insurance, pension schemes, and other perks can be a significant cost. These benefits help attract and retain talent.
  4. Paid Leave:

    • Employees in Malta are entitled to various types of paid leave, including annual leave (minimum of 24 days per year), sick leave, maternity/paternity leave, and public holidays. Employers must account for these in their workforce planning and budgeting.
  5. Training and Development:

    • Investing in employee training and development to enhance skills and productivity can also be a notable expense.

Using an Employer of Record (EOR) like Rivermate:

An EOR can help manage and potentially reduce some of these costs by handling various administrative and compliance-related tasks. Here are the benefits of using an EOR in Malta:

  1. Compliance Assurance:

    • An EOR ensures that all employment practices comply with local laws and regulations, reducing the risk of legal issues and associated costs.
  2. Administrative Efficiency:

    • By outsourcing payroll, tax filings, and social security contributions to an EOR, employers can save time and reduce the administrative burden.
  3. Cost Predictability:

    • EOR services typically charge a flat fee or a percentage of the payroll, providing more predictable and manageable costs.
  4. Focus on Core Business:

    • With the administrative and compliance tasks handled by the EOR, businesses can focus more on their core activities and strategic growth.
  5. Scalability:

    • EORs facilitate easier scaling of operations, allowing businesses to hire quickly without setting up a legal entity in Malta, which can be costly and time-consuming.

In summary, while employing someone in Malta involves various direct and indirect costs, using an Employer of Record like Rivermate can streamline the process, ensure compliance, and potentially reduce overall expenses, allowing businesses to focus on their core operations.

What is the timeline for setting up a company in Malta?

Setting up a company in Malta involves several steps and can take anywhere from a few days to several weeks, depending on the complexity of the business structure and the efficiency of the processes. Here is a detailed timeline for setting up a company in Malta:

  1. Company Name Reservation (1-2 days):

    • The first step is to choose and reserve a unique company name. This can be done through the Malta Business Registry (MBR). The name reservation process typically takes 1-2 days.
  2. Preparation of Documentation (3-5 days):

    • Prepare the necessary documentation, including the Memorandum and Articles of Association, identification documents of the shareholders and directors, and other required forms. This step can take around 3-5 days, depending on how quickly the documents are prepared and reviewed.
  3. Opening a Bank Account (1-2 weeks):

    • Open a corporate bank account in Malta to deposit the initial share capital. This process can take 1-2 weeks, as it involves due diligence checks by the bank.
  4. Deposit Share Capital (1-2 days):

    • Deposit the required share capital into the corporate bank account. The minimum share capital for a private limited company in Malta is €1,165, with at least 20% paid up. This step usually takes 1-2 days.
  5. Submission of Incorporation Documents (1-2 days):

    • Submit the incorporation documents to the Malta Business Registry. This includes the Memorandum and Articles of Association, proof of share capital deposit, and other required forms. The submission process typically takes 1-2 days.
  6. Company Registration (2-3 days):

    • Once the documents are submitted, the Malta Business Registry will review and process the application. If everything is in order, the company will be registered, and a Certificate of Incorporation will be issued. This step usually takes 2-3 days.
  7. Tax Registration (1-2 weeks):

    • Register the company for tax purposes with the Inland Revenue Department. This includes obtaining a Tax Identification Number (TIN) and registering for VAT if applicable. This process can take 1-2 weeks.
  8. Social Security Registration (1-2 weeks):

    • Register the company with the Social Security Department to ensure compliance with social security contributions for employees. This step can take 1-2 weeks.
  9. Business Licenses and Permits (Variable):

    • Depending on the nature of the business, additional licenses or permits may be required. The timeline for obtaining these can vary widely based on the specific requirements and regulatory bodies involved.

In summary, the entire process of setting up a company in Malta can take anywhere from 3 to 8 weeks, depending on the efficiency of each step and the specific requirements of the business. Using an Employer of Record (EOR) service like Rivermate can significantly streamline this process, as they handle many of the administrative and compliance tasks on behalf of the company, allowing you to focus on your core business activities.

Do employees receive all their rights and benefits when employed through an Employer of Record in Malta?

Yes, employees in Malta receive all their rights and benefits when employed through an Employer of Record (EOR) like Rivermate. An EOR ensures compliance with local labor laws and regulations, which is crucial for protecting employee rights and benefits. Here are some key aspects of how an EOR like Rivermate ensures this in Malta:

  1. Employment Contracts: An EOR provides legally compliant employment contracts that adhere to Maltese labor laws. These contracts outline the terms of employment, including job responsibilities, salary, benefits, and termination conditions.

  2. Wages and Salaries: Employees receive their wages and salaries in accordance with Maltese minimum wage laws and industry standards. The EOR ensures timely and accurate payroll processing, including the calculation of taxes and social security contributions.

  3. Social Security and Taxes: The EOR handles all statutory contributions, including social security and income tax deductions, ensuring compliance with Maltese tax laws. This guarantees that employees are covered under the national social security system.

  4. Leave Entitlements: Employees are entitled to various types of leave, such as annual leave, sick leave, maternity/paternity leave, and public holidays, as mandated by Maltese law. The EOR ensures that these entitlements are correctly administered and recorded.

  5. Health and Safety: An EOR ensures that the workplace complies with Maltese health and safety regulations, providing a safe working environment for employees.

  6. Termination and Severance: In the event of termination, the EOR ensures that the process follows Maltese labor laws, including the provision of any required notice periods and severance pay.

  7. Employee Benefits: Beyond statutory requirements, an EOR can also facilitate additional benefits such as private health insurance, retirement plans, and other perks that may be customary or negotiated as part of the employment package.

By using an EOR like Rivermate in Malta, employers can be confident that their employees are receiving all their legal rights and benefits, while also reducing the administrative burden and risk of non-compliance with local labor laws.

What legal responsibilities does a company have when using an Employer of Record service like Rivermate in Malta?

When a company uses an Employer of Record (EOR) service like Rivermate in Malta, the EOR assumes many of the legal responsibilities associated with employment. However, the company still retains certain obligations and must ensure compliance with local laws. Here are the key legal responsibilities and considerations:

  1. Compliance with Maltese Employment Laws: The EOR ensures that all employment contracts, payroll, benefits, and terminations comply with Maltese labor laws. This includes adherence to the Employment and Industrial Relations Act (EIRA), which governs employment conditions, employee rights, and employer obligations in Malta.

  2. Payroll and Taxation: The EOR handles payroll processing, ensuring that employees are paid correctly and on time. They also manage the calculation and remittance of income tax, social security contributions, and other statutory deductions to the Maltese authorities.

  3. Employment Contracts: The EOR provides legally compliant employment contracts that meet Maltese standards. These contracts outline the terms of employment, including job duties, compensation, benefits, and termination conditions.

  4. Employee Benefits: The EOR administers employee benefits in accordance with Maltese law, such as paid leave, sick leave, maternity/paternity leave, and any other statutory benefits. They also ensure compliance with any mandatory health and safety regulations.

  5. Work Permits and Visas: If the company hires foreign nationals, the EOR assists with obtaining the necessary work permits and visas, ensuring compliance with Maltese immigration laws.

  6. Termination and Severance: The EOR manages the termination process, ensuring that it is conducted in accordance with Maltese law. This includes providing the appropriate notice period, calculating severance pay, and handling any disputes that may arise.

  7. Data Protection: The EOR ensures compliance with the General Data Protection Regulation (GDPR), which applies in Malta as an EU member state. This includes safeguarding employee data and ensuring that all data processing activities are lawful and transparent.

  8. Employee Relations: The EOR handles day-to-day employee relations, including addressing grievances, managing performance issues, and ensuring a compliant and harmonious workplace environment.

  9. Local Representation: The EOR acts as the local employer on record, which can be particularly beneficial for companies without a physical presence in Malta. This local representation helps navigate the complexities of Maltese employment law and provides a point of contact for employees.

  10. Ongoing Compliance Monitoring: The EOR continuously monitors changes in Maltese employment laws and regulations, ensuring that the company remains compliant with any new legal requirements.

While the EOR takes on many of the administrative and legal burdens, the company must still oversee the overall employment strategy, maintain communication with the EOR, and ensure that the EOR's services align with the company's business objectives and culture. Additionally, the company should conduct due diligence when selecting an EOR to ensure they have a strong understanding of Maltese employment law and a proven track record of compliance.

How does Rivermate, as an Employer of Record in Malta, ensure HR compliance?

Rivermate, as an Employer of Record (EOR) in Malta, ensures HR compliance through a comprehensive approach that addresses the unique regulatory and legal landscape of the country. Here are the key ways Rivermate ensures HR compliance in Malta:

  1. Local Expertise and Knowledge: Rivermate employs local HR and legal experts who are well-versed in Maltese employment laws and regulations. This local expertise ensures that all employment practices are in line with the latest legal requirements, including labor laws, tax regulations, and social security obligations.

  2. Employment Contracts: Rivermate prepares and manages employment contracts that comply with Maltese labor laws. These contracts cover essential aspects such as job descriptions, compensation, benefits, working hours, and termination conditions, ensuring that both the employer and employee are protected under Maltese law.

  3. Payroll Management: Rivermate handles payroll processing in accordance with Maltese regulations. This includes accurate calculation of salaries, deductions, and contributions to social security and other statutory funds. By managing payroll, Rivermate ensures timely and compliant salary payments, reducing the risk of legal issues.

  4. Tax Compliance: Rivermate ensures that all tax obligations are met, including income tax withholding and reporting. They stay updated on any changes in tax laws and ensure that both the employer and employees are compliant with Maltese tax regulations, thereby avoiding penalties and fines.

  5. Social Security Contributions: Rivermate manages the mandatory social security contributions for employees in Malta. This includes contributions to the National Insurance Scheme, which covers benefits such as healthcare, pensions, and unemployment insurance. By handling these contributions, Rivermate ensures compliance with Maltese social security laws.

  6. Employee Benefits Administration: Rivermate administers employee benefits in accordance with Maltese law, including statutory benefits such as paid leave, maternity/paternity leave, and sick leave. They also manage any additional benefits that the employer may offer, ensuring that all benefits are provided and documented correctly.

  7. Labor Law Compliance: Rivermate ensures adherence to Maltese labor laws, including regulations on working hours, overtime, rest periods, and workplace safety. They provide guidance on legal requirements and help implement policies that comply with these laws, thereby minimizing the risk of labor disputes and legal challenges.

  8. Termination and Severance: Rivermate manages the termination process in compliance with Maltese employment laws. This includes ensuring that proper notice is given, severance pay is calculated correctly, and all legal requirements are met to avoid wrongful termination claims.

  9. Data Protection and Privacy: Rivermate ensures compliance with data protection laws, including the General Data Protection Regulation (GDPR), which applies in Malta. They implement robust data protection policies and practices to safeguard employee information and ensure that all data handling is compliant with legal standards.

  10. Continuous Monitoring and Updates: Rivermate continuously monitors changes in Maltese employment laws and regulations. They proactively update their practices and inform their clients of any changes that may impact their employment arrangements, ensuring ongoing compliance.

By leveraging Rivermate's services as an Employer of Record in Malta, companies can confidently navigate the complexities of Maltese employment laws, reduce administrative burdens, and focus on their core business activities while ensuring full HR compliance.

What is HR compliance in Malta, and why is it important?

HR compliance in Malta refers to the adherence to the local labor laws, regulations, and standards that govern employment practices within the country. This includes a wide range of legal requirements related to employment contracts, wages, working hours, health and safety, anti-discrimination policies, termination procedures, and employee benefits.

Key Aspects of HR Compliance in Malta:

  1. Employment Contracts: In Malta, it is mandatory to provide employees with a written contract that outlines the terms and conditions of employment. This includes job duties, salary, working hours, and other relevant details.

  2. Wages and Salaries: Employers must comply with the national minimum wage laws and ensure timely payment of salaries. Any deductions must be lawful and agreed upon by the employee.

  3. Working Hours and Overtime: The standard working week in Malta is 40 hours. Any work beyond this is considered overtime and must be compensated at a higher rate as stipulated by law.

  4. Leave Entitlements: Employees are entitled to various types of leave, including annual leave, sick leave, maternity/paternity leave, and public holidays. Employers must ensure these entitlements are granted in accordance with Maltese law.

  5. Health and Safety: Employers are required to provide a safe working environment and adhere to health and safety regulations to prevent workplace accidents and injuries.

  6. Anti-Discrimination: Maltese law prohibits discrimination based on gender, race, religion, age, disability, and other protected characteristics. Employers must implement policies to ensure a non-discriminatory workplace.

  7. Termination Procedures: There are specific legal requirements for terminating an employee, including notice periods and severance pay. Employers must follow these procedures to avoid legal disputes.

Importance of HR Compliance in Malta:

  1. Legal Protection: Adhering to HR compliance helps protect the company from legal disputes, fines, and penalties. Non-compliance can result in costly litigation and damage to the company's reputation.

  2. Employee Satisfaction: Compliance with labor laws ensures that employees are treated fairly and their rights are protected. This leads to higher job satisfaction, better morale, and increased productivity.

  3. Reputation Management: Companies that comply with HR regulations are viewed more favorably by employees, customers, and the public. This can enhance the company's reputation and make it more attractive to top talent.

  4. Operational Efficiency: Understanding and implementing HR compliance helps streamline HR processes and reduces the risk of errors. This leads to more efficient operations and better management of human resources.

  5. Risk Mitigation: By staying compliant, companies can mitigate risks associated with employment practices, such as wrongful termination claims, discrimination lawsuits, and workplace accidents.

Using an Employer of Record (EOR) like Rivermate in Malta:

An Employer of Record (EOR) service like Rivermate can be highly beneficial for companies operating in Malta. An EOR takes on the legal responsibilities of employment, ensuring full compliance with local labor laws. This includes handling payroll, taxes, benefits, and other HR functions. By using an EOR, companies can:

  • Ensure Compliance: Rivermate ensures that all employment practices are in line with Maltese laws, reducing the risk of non-compliance.
  • Save Time and Resources: Outsourcing HR functions to an EOR allows companies to focus on their core business activities without worrying about the complexities of local employment laws.
  • Access Expertise: Rivermate provides expert knowledge of Maltese labor laws and regulations, helping companies navigate the local HR landscape effectively.
  • Flexibility: Companies can quickly and easily hire employees in Malta without the need to establish a legal entity, providing greater flexibility in managing their workforce.

In summary, HR compliance in Malta is crucial for legal protection, employee satisfaction, and operational efficiency. Using an EOR like Rivermate can help companies ensure compliance, save resources, and access local expertise, making it easier to manage their workforce in Malta.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.