Looking for an Employer of Record in Malta? Here’s what you need to know

Knowing how best to hire and pay employees in Malta can be challenging. To abide by local labor laws, you need to be clear on your obligations and stay up-to-date with changing legislation.

International companies sometimes use an Employer of Record (EOR) to engage employees in a new country. However, using an Employer of Record in Malta may not be permitted.

Instead, companies can use a workforce management platform, like Payoneer Workforce Management, to simplify the talent engagement and employee management process.

Find out more about Payoneer Workforce Management, or keep reading to discover what the process of engaging talent in Malta involves.

How to hire employees in Malta

To engage talent in Malta, global companies typically have three options:

1. Set up a local entity: You can register a local subsidiary to employ Maltese workers. This approach takes a lot of time and effort, and leaves you solely responsible for labor law compliance.

2. Hire independent contractors or freelancers: This approach offers more flexibility, but you have to be wary of misclassification. If the relationship resembles that of employer and employee, you could face penalties.

3. Workforce management platform: A workforce management platform allows you to engage local talent without a local entity. The platform offers assistance with onboarding, management, and local compliance.

A partner like Payoneer Workforce Management can help you mitigate risks related to contractor misclassification and set up localized benefits as per local laws and requirements.

How to onboard employees in Malta

An effective onboarding process helps you welcome Maltese employees into your company and comply with all relevant labor laws.

Onboarding employees in Malta involves meeting local employment obligations and completing several administrative steps. 

A streamlined onboarding process in Malta typically includes:

• Payroll and statutory setup: Register the employee with Malta’s social security system, ensure payroll details are set up correctly, and complete all necessary tax and contribution submissions.
• Device and workspace preparation: Provide all essential equipment, software access, and credentials before the employee’s first working day. Confirm their on-site or remote workspace is ready.
• First week orientation: Deliver an introduction covering company policies, workplace practices, compliance expectations in Malta, and a clear overview of the employee’s responsibilities.
• Team and stakeholder introductions: Arrange initial meetings with the employee’s manager, team, and relevant partners to support smooth integration and early collaboration.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform.

Pay employees in Malta

Employees in Malta are paid in euros (EUR). Companies have to pay employees in Malta at least the minimum wage, which is EUR ​​213.54 per week.

According to Malta payroll laws, employers need to consider income tax (which is paid at rates ranging from 0% to 35%) and social security payments. 

This social security provides pensions, healthcare, and other benefits to those who contribute. Public healthcare is also free for residents who contribute to social security.

Payoneer Workforce Management is a unified, all-in-one platform. You can manage your entire global workforce from a single dashboard and pay contractors in just a few clicks.  

Employment laws in Malta

Any company employing workers in Malta has to comply with local laws and regulations. Important employment laws to be aware of include:

• Working hours: Employees should work no more than 40 hours per week.
• Overtime hours: Anything above the standard working hours is considered overtime with mutual agreement. Overtime pay is 1.5x for normal days, 2x for weekends and public holidays.
• Probation period: A probation period is mandatory and can last from 3 to 6 months. For administrative, technical, managerial, and executive roles with a salary more than 2 times the minimum wage, the probation period can last for up to 1 year.

Get support to stay compliant with Malta’s payroll and labor laws using Payoneer Workforce Management’s infrastructure.

Minimum wage in Malta

The national minimum wage in Malta is EUR ​​213.54 per week and applies to all full-time employees over 18 years old. 

Companies employing workers in Malta should check the minimum wage regularly to stay compliant with changing legislation.

Employment contracts in Malta

When a written contract has been signed by both the employer and the employee, the employer should give the employee a signed copy of the agreement no later than 7 days after the employee has started work.

An employment contract in Malta should include:

• Name, ID number, and address of both employer and employee
• Job title
• Place of work
• Where applicable, any duties that will take place outside of Malta
• Start date
• Length of probation period
• Details of salary, overtime rates, and when wages will be paid
• Normal hours of work
• Details of the vacation leave, sick leave, and any other leave an employee is entitled to
• Notice period
• Where applicable, a copy of the relevant collective agreement

With Payoneer Workforce Management, you can onboard talent quickly and securely with localized contracts and payroll.

Leave policy in Malta

In Malta, employers must offer leave, including vacation time, public holidays, sick leave, and more.

Vacation leave and public holidays

Employees are entitled to 24 days of vacation leave per year. Vacation leave has to be used within the same year, and unused leave cannot be claimed as payment. However, up to 50% of the entitlement can be carried forward if this is specified in the employee agreement.

Employees are also entitled to 12 public holidays.

Sick leave

Employees are entitled to 40 days of sick leave. An employee is entitled to full pay for the first 20 days, and ½ pay through social security for the subsequent 20 days.

Parental leave

In Malta, mothers are entitled to 18 weeks’ maternity leave, with 4 weeks to be taken before the birth of the child. Partners are entitled to 10 days’ paternity leave. Parents can take childcare leave of 4 months at any time until their child reaches the age of 8.

Work permit in Malta

EU, EEA, and Swiss citizens can enter, live, and work in Malta without a permit. However, non-EU nationals who want to work in Malta need an employment offer from a local employer to obtain a residence permit. 

You can check the Maltese government website for more information about permits.

Background check in Malta

When engaging an employee in Malta, you may like to carry out background checks. This can include things like a criminal check, an employment and education history check, and a social media check.

You likely need consent from the employee before carrying out any background checks. You also need to disclose exactly what checks you will be running. Always check local regulations before conducting any background checks in Malta.

Employment termination in Malta

You can end an employment contract in Malta in the following scenarios:

• Employee resignation
• Mutual agreement between the employee and the employer
• Termination during probationary period
• Termination by the employer due to misconduct, performance issues, absence without leave, etc

Employers in Malta can terminate an employee contract based on these valid grounds. Termination without valid grounds may be considered unfair dismissal and can lead to legal consequences for the employer.

The termination of an employment contract is a complicated process and needs to be handled delicately on a case-by-case basis.

Notice period and severance pay

Notice periods apply for both employees and employers. During the probation period, the notice period is generally 1 week. After probation, the following applies:

Company registration in Malta

Companies looking to hire employees in Malta can choose to register their company in Malta. This allows you to hire employees directly, but it involves considerable time and administration. It also requires a thorough understanding of your legal obligations as you’ll be solely responsible for compliance.

You can find information on how to register a company in Malta on the country’s government website.

A workforce management platform provides an easier way to engage talent in Malta. Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity.

PEO in Malta

A PEO is designed to help you with HR and admin tasks for employees you already employ through your local entity.

While some countries allow the use of EORs, in Malta, companies should use compliant workforce management solutions. These platforms help manage HR and compliance processes for companies without a local entity. This is invaluable for international companies seeking global talent.

Explore Payoneer Workforce Management services in Malta

Working with a partner like Payoneer Workforce Management helps support global operations and access local talent. 

Our unified platform offers support with:

• Onboarding
• Payroll and taxes
• Local compliance
• Benefits administration
• Timesheets and more

Book a demo to find out more.

FAQs

1) Are there EORs in Malta?

You can’t use an Employer of Record in Malta. But you can use a workforce management platform. With a partner like Payoneer Workforce Management, you can stay compliant with local labor laws, mitigate compliance risks, set up localized benefits, and engage talent across borders.

2) How much does it cost to hire talent in Malta?

It costs around 12% of an annual salary of USD 60,000 to engage talent in Malta. The employer cost varies depending on the employee’s salary and other local factors. You can use our cost calculator tool for a detailed cost breakdown.

3) Why hire talent in Malta through a workforce management platform?

Payoneer Workforce Management allows you to onboard and pay employees across the globe in 70+ currencies. Get in touch for details.