How to Hire Employees in Malta

Malta has become a compelling hiring destination for international companies building teams across Europe.

Skilled talent pools, EU market access, and competitive employment costs drive growing employer interest in the country.

• Companies hire in Malta to access the EU infrastructure and multilingual professionals
• Maltese labour law and payroll rules require careful local compliance
• Choosing the right hiring model directly affects cost, speed, and legal risk

This guide covers hiring models, employment contracts, payroll obligations, tax contributions, compliance requirements, onboarding procedures, and termination rules that foreign employers must understand before hiring remote employees in Malta.

Successful hiring in Malta depends on understanding local employment obligations and regulatory expectations.

Overview of Hiring Employees in Malta

Malta's workforce is growing faster than the EU-27 average, with 28% of its population consisting of foreign nationals as of 2023. International employers increasingly hire there due to EU membership, English-speaking talent, and a growing tech sector.

• Foreign employers face complex multi-agency registration and reporting requirements
• Local compliance protects against fines, back payments, and operational restrictions
• This guide explains contracts, payroll, taxes, benefits, permits, and termination rules

This article serves as a practical hiring roadmap rather than a legal document.

Employers will learn how to hire compliantly and manage employment obligations in Malta.

What Are the Employment Options for Hiring Employees in Malta?

Foreign companies entering Malta can choose between three primary hiring models: establishing a local entity, using an Employer of Record, or hiring independent contractors.

Companies choose different models based on budget, risk tolerance, and speed of market entry.

Each option carries distinct compliance implications, explained below.

Hiring Through a Local Entity

Establishing a Maltese legal entity requires registering as an "overseas company" with the Malta Business Registry.

Employers take on full payroll, tax withholding, employment contract, and social security compliance responsibilities.

This model suits companies planning long-term operations with larger, permanent teams in Malta.

Hiring Through an Employer of Record (EOR)

An employer of record legally employs workers in Malta on behalf of an international client company.

The EOR manages payroll processing, tax compliance, benefits administration, employment contracts, and adherence to Maltese labour laws. The client company retains day-to-day management of work activities and performance.

Employers choose this model for fast, lower-risk expansion without local entity setup costs.

Hiring Contractors in Malta

Companies commonly engage independent contractors in Malta for project-based or specialised work.

Contractors work best for temporary assignments where the scope and duration are clearly defined.

Misclassifying employees as contractors creates serious legal risks. Malta's Employment Status National Standard Regulation triggers an employment presumption when five of eight specified criteria are met.

What Are the Legal Requirements for Hiring in Malta?

The Employment and Industrial Relations Act (EIRA) is Malta's primary statutory framework governing employment relationships and employer responsibilities.

• Written employment contracts are mandatory when employment exceeds one month
• Employers must register employees with the Revenue and Social Security authorities
• Payroll taxes and social security contributions must be withheld and remitted
• Employees receive statutory protections, including leave, rest periods, and dismissal safeguards

Employers must provide written contracts within seven calendar days, register for a PE number, and file monthly FS5 returns.

Working hours cannot exceed an average of 48 hours per week, including overtime. Employees are entitled to 11 consecutive hours of daily rest, 24 hours of weekly rest, and mandatory annual leave under Maltese law.

Non-compliance can result in administrative fines, enforcement action, and criminal exposure.

Employment Contracts in Malta

Written, locally compliant contracts are a legal requirement when hiring remote employees or on-site staff in Malta.

Contracts must reflect EIRA requirements and EU Directive standards on transparent working conditions.

Types of Employment Contracts

Malta recognises three main employment contract types used across industries.

Employers commonly include probationary periods to evaluate new hires. Standard probation lasts six months, with entry-level roles typically using three-month periods. Probation must be explicitly documented in the employment agreement.

What to Include in an Offer Letter When Hiring Employees in Malta

Offer letters summarise the proposed employment arrangement before the formal contract is signed.

• Job title, responsibilities, and reporting structure for the role
• Compensation details, including base salary, bonuses, and COLA allowance
• Working hours, location, and any unpredictable work pattern arrangements
• Benefits, entitlements, leave provisions, and training opportunities
• Proposed start date and probation period duration

Including these details reduces misunderstandings between the employer and the employee. It also creates a smoother transition to the formal employment contract.

NDAs and Confidentiality Agreements

Employers in Malta use confidentiality agreements and NDAs to protect sensitive business information.

These agreements cover intellectual property, proprietary processes, and client data protection.

NDAs must align with Maltese law in scope and duration to remain enforceable in practice.

Employee Compensation, Payroll, Taxes, and Benefits in Malta

Understanding salary structures, payroll tax obligations, statutory benefits, and contribution requirements is essential before hiring employees in Malta. Employers must also account for the mandatory Cost of Living Adjustment (COLA).

Payroll and Salary Structure in Malta

Employers in Malta structure salaries with base pay, statutory allowances, and performance-related components.

Gross pay includes the basic salary, bonuses, and required statutory deductions.

• Most salaries are quoted and paid every month
• Bank transfers are the standard method for salary distribution

Employer Payroll Obligations

Employers must register with the Commissioner for Revenue and the Department of Social Security before processing payroll.

Monthly FSS and social security remittances are due by the 9th of the following month. Annual FS3 reconciliation statements must be filed by March 31st. Payroll records must be retained for ten years.

Employee Tax Contributions

Income tax in Malta is applied on a graduated progressive basis, ranging from 0% to 35%.

Tax deductions and filing status determine each employee's net take-home pay.

• Tax rates progress from 0% on the first €12,000 to 35% above €60,000
• Employee deductions from salary reduce net compensation accordingly

Social Security Contributions

Both employers and employees share social security contributions at equivalent rates based on basic weekly wages.

Contributions cover pension, healthcare, and unemployment benefits for all insurable employees aged 16 to 65.

Minimum Wage and Statutory Pay Requirements

Malta's national minimum wage for employees aged 18 and above is €221.78 per week as of January 2025.

Overtime beyond 40 hours per week is compensated at 150% of normal wages. Sunday work requires 200%, and public holidays require 300%.

• Employers must meet or exceed minimum wage thresholds in every pay period
• Overtime, holiday, and leave payments carry additional statutory requirements

How Do Employers Pay Employees in Malta?

Payment Methods

Bank transfer is the most common method employers use to pay international employees in Malta.

Employers should maintain detailed payment records for compliance and audit purposes.

Salary Payment Frequency

Most employees in Malta are paid on a monthly schedule.

Employers follow a predictable payroll cycle. Monthly payments are standard for salaried employees, and consistency in payment timing is expected under local practice.

How to Onboard Employees in Malta

Structured onboarding supports both compliance and employee retention from the first day of employment.

New Hire Onboarding Checklist

Employers should complete several key tasks before a new employee's start date.

• Sign the employment contract before or on the first working day
• Register payroll and tax details with Revenue and Social Security
• Provide equipment, tools, and system access required for the role
• Share internal policies, procedures, and any mandatory training materials
• Introduce the reporting manager, direct team, and key stakeholders

Completing these steps early creates a smoother onboarding experience and reduces compliance mistakes. Written contracts or minimum conditions statements must be provided within seven calendar days. Companies looking to onboard international employees should plan for this timeline.

Required Employee Documentation

Employers must collect essential documentation from every new hire in Malta.

• Government-issued identification, such as a passport or a national ID card
• Bank account details, including IBAN for salary transfers
• Tax registration and payroll information for withholding purposes
• Signed employment agreement covering all statutory required elements
• Work permit documentation if the employee is a non-EU national

All documents must be stored securely and in compliance with data protection requirements.

What Are the Best Interviewing and Hiring Practices in Malta?

Employers should follow fair, transparent, and legally compliant hiring practices throughout the recruitment process in Malta.

• Avoid discriminatory interview questions based on sex, age, religion, or ethnicity
• Clearly explain the hiring process, stages, and evaluation criteria to candidates
• Communicate timelines, expectations, and next steps early in the process
• Collect candidate data securely and transparently under local privacy laws

Candidates in Malta expect timely communication, professional interviews, and a transparent recruitment experience. Discrimination at the recruitment stage is illegal under Maltese employment law.

Employers must follow local privacy and anti-discrimination legislation throughout every stage of hiring.

What Are the Work Permit Requirements for Hiring in Malta?

Hiring in Malta differs significantly depending on whether the employee is an EU or non-EU national.

EU and EEA nationals can work in Malta without a visa or work permit.

• Non-EU employees require formal work authorisation before starting employment
• Employers may need to sponsor Single Permit or EU Blue Card applications
• Supporting documents include qualifications, health insurance, and police certificates

Non-EU applicants typically need a Single Permit (D Visa), which requires the employer to apply through Identity Malta. A mandatory Labour Market Test, effective October 2025, requires vacancies to be advertised on Jobsplus and EURES portals for three weeks.

Employers must ensure valid work authorisation remains active throughout the employment period.

How Does Termination of Employment Work in Malta?

Termination rules in Malta require careful compliance to avoid unfair dismissal claims and penalties.

What Are the Lawful Grounds for Termination?

The most common legal grounds for termination include performance issues, misconduct, redundancy, and business closure.

Negligence, dishonesty, and flagrant disobedience constitute just cause under Maltese law.

Employers must document termination reasons carefully. The burden of proof falls on the employer, and unfair dismissal claims must be filed within four months of the alleged violation.

Notice Periods

Maltese labour law mandates advance notice before termination on a sliding scale based on service length.

Notice periods range from one week for employees with under six months of service to eight weeks plus one additional week per year beyond seven years.

Immediate termination may be permitted only in exceptional circumstances involving serious misconduct.

Severance Requirements

There is no mandated severance pay specified under Maltese labour law.

Severance requirements depend on the specific circumstances of each termination and any applicable collective agreements.

Incorrect severance calculations frequently create disputes. Employees made redundant have re-employment rights if the position reopens within one year.

How Do You Classify Employees vs Contractors in Malta?

Correctly classifying workers as employees or contractors is essential for legal and financial compliance in Malta. Companies looking to hire independent contractors must understand the classification criteria.

Misclassification can lead to fines, back payments, and legal disputes. Malta's Employment Status National Standard Regulation presumes an employment relationship when five of eight criteria are met, including 75% income dependency on a single client.

What Are the Compliance Risks When Hiring in Malta?

International employers most commonly encounter compliance failures in payroll, contracts, and worker classification.

• Payroll taxes filed incorrectly or remitted late trigger fines and interest
• Weak employment contracts expose employers to unfair dismissal claims
• Misclassified workers and poorly documented terminations create legal disputes

These issues result in administrative fines, regulatory audits, and employee complaints. Bookkeeping violations alone carry fines ranging from €700 to €10,000 per offence, with daily penalties accumulating.

Prevention through proper compliance structures is far easier than correcting mistakes after enforcement action.

How Does an Employer of Record Help You Hire in Malta?

An EOR enables companies to hire employees in Malta without establishing a local entity or managing local registrations.

• Manages payroll management, tax withholding, and statutory filings
• Creates compliant employment contracts aligned with Maltese labour law
• Manages benefits administration, leave entitlements, and social security
• Reduces local compliance risk by carrying the employment liability

An EOR helps companies hire faster, enter Malta with reduced legal exposure, and scale headcount without permanent infrastructure costs. Understanding the employer of record cost structure helps with budgeting.

This model works well for international expansion, where speed and compliance must be balanced.

Why Use Gloroots to Hire Employees in Malta

Gloroots operates as an EOR and global employment partner, enabling entity-free employment in Malta with centralised compliance oversight.

• Local payroll processing in euros with income tax and statutory contribution management
• End-to-end employment support from contracts through termination compliance
• Faster onboarding with locally compliant agreements and benefits administration
• Scalable infrastructure for managing international teams across multiple countries

Gloroots helps companies run employment in Malta with predictable costs while reducing payroll cost complexity and regulatory risk. In-house expertise and human-led support ensure consistent execution across countries. Employer of record software from Gloroots provides centralised visibility into headcount, payroll, and compliance status.

FAQs About Hiring Employees in Malta

Can a foreign company hire employees in Malta without setting up a local entity?

Yes. Companies can hire through an Employer of Record without creating a local entity in Malta.

Setting up a local entity becomes more practical for companies with large permanent teams or regulated industry requirements. An EOR is typically more cost-effective for teams ranging from one to over a hundred employees.

What are the legal requirements for hiring employees in Malta?

Employers must provide written employment contracts within seven calendar days of employment commencing.

Additional requirements include registering with Revenue and Social Security authorities, withholding payroll taxes under the FSS system, providing statutory benefits, and complying with anti-discrimination laws. Payroll records must be retained for ten years.

What taxes and social security contributions do employers pay in Malta?

Employers contribute toward payroll taxes and social security at rates equivalent to employee contributions.

Social security covers pension, healthcare, and unemployment benefits. Income tax ranges from 0% to 35% on a progressive basis, and employers must withhold and remit both income tax and social security contributions monthly.

How long does it take to hire and onboard an employee in Malta?

Hiring through an EOR can be completed in days to weeks. Local entity setup takes three to six months or longer.

Timelines depend on the employee's nationality, documentation readiness, and hiring method. Non-EU hires require a Labour Market Test of at least three weeks, plus additional application processing time.

What is the easiest way to hire employees in Malta compliantly?

Many international employers use an Employer of Record for compliant hiring in Malta.

An EOR manages payroll, employment contracts, tax filings, benefits, and termination procedures. This approach accelerates hiring while ensuring local compliance, particularly for companies learning how to hire international employees for the first time.