Hire employees in Malta
What a foreign company needs to know before employing people in Malta: whether you need a local entity, what an employee costs with capped social security and statutory bonuses, how the Final Settlement System and the new Highly Skilled Individuals regime shape payroll, what a dismissal requires after probation, and why agency licensing rules shape how you structure a hire. Written for CHROs, CFOs, General Counsel and founders.
Employer of record in Malta: quick answers
The questions leadership teams ask first.
Do I need a local entity in Malta to hire?
No. There are three routes:
- Employer of Record. Dryft Global employs the person in Malta through a compliant local employer, files the FS4 and Jobsplus engagement form, withholds tax and social security under the Final Settlement System and runs payroll in euro. You direct the work.
- Direct local entity. You form a private limited company, register for FSS, tax and VAT and set up payroll: plan for 2 to 4 weeks before the first payroll.
- Independent contractor. Lawful only for genuinely independent work. Meeting 5 of the 8 employment status criteria makes the arrangement employment.
When should I use an EOR instead of registering locally?
Use an EOR for your first engineers, finance staff or sales people in Malta, when you want to start in days and do not want to build FSS registration, Jobsplus notification and monthly FS5 payments yourself. Your own entity earns its keep for a sustained team, a business needing a Maltese licence or a company seeking Highly Skilled Individuals status for its staff.
What does an employee actually cost beyond salary?
The employer pays 10% Class 1 social security on the basic wage, capped at EUR 55.93 a week, plus 0.3% to the Maternity Leave Trust Fund, and pays statutory bonuses of EUR 512.52 a year. On a EUR 4,000 monthly salary that is about 6% on top of gross pay. Budget about 6% to 11% with private health cover and contractual bonuses.
How difficult is termination in Malta?
After probation a dismissal needs good and sufficient cause, such as conduct, capability or genuine redundancy, and redundancy follows last in, first out. Notice runs from 1 week to 12 weeks by service, or pay in lieu, and there is no statutory severance pay. Unfair dismissal claims go to the Industrial Tribunal within 4 months.
Can Dryft Global legally employ my team in Malta?
Yes. Dryft Global employs your team in Malta through a compliant local employer set up for the Malta rules on agency licensing and equal treatment. We issue written terms, file the FS4 and Jobsplus forms, withhold and pay tax and social security monthly, pay the statutory bonuses, administer leave and manage notice and dismissal.
Hiring routes compared
Speed, set-up burden and liability differ by route.
| Factor | Direct local entity | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Time to first payroll | 2 to 4 weeks | Days to 2 weeks | Days |
| Local entity required | Yes, private limited company | No | No |
| FSS, Jobsplus and social security | Your registrations | Handled by Dryft Global | Contractor's own |
| Agency licensing and equal treatment | Not applicable | Structured compliantly by Dryft | Not applicable |
| Statutory liability | Direct corporate exposure | Assumed by Dryft Global | High if 5 of 8 criteria are met |
| Best fit | Sustained team, licensed sectors | First hires, engineering teams | Short independent projects |
What an employee costs in Malta
Employer social security is capped, so on professional salaries it is close to a fixed amount. The model below is a St Julian's software engineer on EUR 4,000 gross a month, EUR 48,512.52 a year including statutory bonuses.
| Component | Employer share | Notes |
|---|---|---|
| Class 1 social security | 10% | Capped at EUR 55.93 a week (born from 1962) |
| Maternity Leave Trust Fund | 0.3% | Capped at EUR 1.68 a week |
| Statutory bonuses | EUR 512.52 a year | Paid in March, June, September and December |
| Statutory subtotal | ~6.2% | EUR 249.64 a month in contributions on EUR 4,000 |
| Private health insurance and bonus | Contractual | Common in technology and financial services |
| Total employer on-cost | ~6% to 11% | Depending on benefits |
For an employee on EUR 4,000 a month, budget roughly EUR 51,500 a year in statutory cost before benefits and the EOR fee. The employee pays capped social security and income tax of about EUR 8,700 a year at single rates, leaving net pay of about EUR 3,073 a month. Ask us for a cost model with current rates applied.
Payroll and tax
Salary is paid in euro at intervals of no more than 4 weeks, usually monthly, with an itemised payslip on each pay date. Under the Final Settlement System the employer withholds income tax and social security and files the FS5 with payment by the end of the following month. The FS3 annual statement goes to each employee and the FS7 reconciliation to the Malta Tax and Customs Administration by 15 February. Each new hire is registered with Jobsplus within 4 working days of the start.
Income tax withholding
At single rates income up to EUR 12,000 a year is tax-free, followed by 15%, 25% from EUR 16,001 and 35% above EUR 60,000. Married and parent rates have wider 0% bands that grow with the number of children. Without an FS4 from the employee, the employer must withhold at 35%. From 1 January 2026 the Highly Skilled Individuals Rules offer a 15% flat rate for eligible senior and specialist roles paid at least EUR 65,000 a year.
Minimum wage 2026
The national minimum wage is EUR 229.44 gross a week for full-time workers aged 18 and over, about EUR 994 a month, including the 2026 cost of living adjustment of EUR 4.66 a week. Sector orders may set higher rates. Budget 2027 announced a further increase for 2027.
Leave and mandatory benefits
- Annual leave. 216 hours (27 days) on a 40-hour week in 2026, because three public holidays fall on a weekend and are added to leave.
- Public holidays. 14 national and public holidays.
- Sick leave. Set by the applicable Conditions of Work Regulation Order in force from 30 June 2026, with leave from day one in regulated sectors; confirm the entitlement under the applicable order.
- Maternity. 18 weeks: 14 paid by the employer and refunded from the Maternity Leave Trust Fund, and 4 paid by the State.
- Paternity. 10 working days on full pay, refundable to the employer.
- Parental leave. 4 months per parent until the child is 8, with 8 weeks paid by the State.
- Working time. 40 hours standard; overtime at 1.5 times where no sector order applies; 48-hour average maximum unless the employee opts out.
Termination and notice periods
Probation can last up to 6 months, or up to 12 months in writing for qualifying senior roles paid at least twice the minimum wage. After probation a dismissal needs good and sufficient cause.
| Item | Rule |
|---|---|
| Notice by service | 1 week (over 1 month) rising to 12 weeks after long service; pay in lieu allowed |
| Valid reasons | Conduct, capability or genuine redundancy |
| Redundancy selection | Last in, first out within the affected class; re-employment right for a year |
| Severance | No statutory severance beyond notice, leave and pro rata bonuses |
| Unfair dismissal | Industrial Tribunal claim within 4 months |
- Fixed-term contracts. Ending early without good cause costs half the wages for the remaining term.
- Collective redundancies. Thresholds by workforce size within 30 days trigger consultation and notice to DIER.
- Jobsplus. File the termination form within 4 days.
Can I use independent contractors?
Only for genuinely independent work. Malta's Employment Status National Standard Order deems a self-employed arrangement to be employment if at least 5 of 8 criteria are met, such as earning 75% or more from one client, working to the client's schedule with its equipment, and being unable to subcontract. Placing workers under another company's direction is regulated: agencies need a DIER licence (EUR 3,000 and a bank guarantee from EUR 20,000), and agency workers get equal pay and benefits from day one. Malta has no separate employer of record legislation, so this is a structuring point to confirm with local counsel for each hire. For anyone who works like an employee, an EOR set up through a compliant local employer is the safe route.
The legal framework in brief
Malta has a mixed legal system, and employment is governed mainly by statute and sector orders. The instruments you will hear most:
- Employment and Industrial Relations Act (Cap. 452). Wages, notice, dismissal and the Industrial Tribunal.
- Transparent and Predictable Working Conditions Regulations 2022. Written terms, probation and parallel employment.
- Conditions of Work Regulation Orders 2026. Sector pay and conditions, including sick leave.
- Final Settlement System. Monthly withholding of income tax and social security.
- Data protection. GDPR and the Data Protection Act (Cap. 586), enforced by the Information and Data Protection Commissioner.
- Immigration and right to work. EU nationals work freely. Others need a Single Permit through Identità, the Key Employee Initiative (from EUR 45,000), the Specialist Employee Initiative (from EUR 30,000) or an EU Blue Card. A Nomad Residence Permit does not allow work for a Maltese employer.
- Authorities. DIER, the Malta Tax and Customs Administration, the Department of Social Security, Jobsplus and Identità.
Where the talent is
About 588,000 people live in Malta, with unemployment of 3.3% in the second quarter of 2026. About 40% of people in employment are foreign nationals. Maltese and English are both official languages, and English is the language of business. Time is UTC+1 (UTC+2 in summer), and Malta is in the EU, Schengen and the eurozone.
| Area | Talent and industry concentration |
|---|---|
| St Julian's and Sliema | iGaming, fintech and technology |
| Valletta and Floriana | Government, finance and professional services |
| Birkirkara and Mriehel | Offices and shared services |
| SmartCity Kalkara | Technology offices |
Malta Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step.
- Step-by-step checklist, from route selection to first payroll
- FS4, Jobsplus registration, written terms and probation set-up
- Gross to net, statutory bonuses and employer cost
- Monthly FS5 and annual FS3 and FS7 filing
- Contractor reclassification and agency licensing checklist
- Notice, good cause and redundancy pack
- Every official Malta authority with direct links
Hiring in nearby markets
Employer of record and hiring guides for other countries in Europe: the Netherlands · North Macedonia · Norway · Poland · Portugal · Romania · Serbia · Slovakia. See all global hiring guides or compare routes in EOR vs PEO vs entity.
This guide is general information, not legal, tax or immigration advice. Malta updates the minimum wage, cost of living adjustment and social security caps each January, and Budget 2027 announced further changes. Confirm current figures and the employment structure with a qualified adviser or with Dryft. Last reviewed November 2026.
Ready to hire in Malta?
Tell us who you want to hire and where they sit. You will get a cost model and a compliant route within a day, from a person who has done this before.