Our guide to Payroll in Malta

Doing Business in Malta

Investing in Malta

Malta continues to rank as one of the EU’s most dynamic economies in 2026:

• Strong growth in financial services, iGaming, logistics, and digital technologies.
• GDP growth reached 6.8% in 2024 and remained strong through 2025–2026.
• Attractive business climate: stable legal framework, pro-investment policies, multilingual workforce.

Basic Facts About Malta

Capital: Valletta

Population: ~ 540,000

Currency: Euro (€)

EU Member: Yes, Schengen Area

Key Sectors: tourism, iGaming, financial services, maritime, aviation, tech

How to say?

Hello: Ħelow / Bongu (Heh-low / Bon-goo)

Good Morning: Bongu (Bon-goo)

Good Evening: Bonswa (Bon-swa)

)Goodbye: Ċaw / Sàħħa (Chow / Sa-hha)

Thank you: Grazzi (Grat-see)

See You Later: Narak aktar tard (to a man) / Narak aktar tard (to a woman) (Na-rak ak-tar tard)

Public Holidays (2026)

Official 2026 public holidays per Government of Malta:

• Jan 1 – New Year’s Day
• Feb 10 – St Paul’s Shipwreck
• Mar 19 – St Joseph
• Mar 31 – Freedom Day
• Apr 3 – Good Friday
• May 1 – Workers’ Day
• Jun 7 – Sette Giugno
• Jun 29 – St Peter & St Paul
• Aug 15 – Assumption
• Sep 8 – Victory Day
• Sep 21 – Independence Day
• Dec 8 – Immaculate Conception
• Dec 13 – Republic Day
• Dec 25 – Christmas

Registrations & Establishing an Entity

Company formation is streamlined and digitalised. Malta offers:

• Limited Liability Company (Ltd) — most common business form.
• Branch registration for foreign entities.
• Consistent with EU corporate governance rules and compliance requirements.
  (General framework complemented by Budget 2026 measures encouraging foreign investment)

Setting up a Legal Structure

Common structures:

• Private Ltd (minimum share capital €1,165)
• Public Ltd (€46,587 capital)
• Partnerships (en nom collectif / en commandite)
• Foundations & associations for non-profit or holding purposes

Banking

Malta’s banking sector is stable and well-regulated.

• Banking is overseen by the MFSA & Central Bank of Malta.
• Digital payments and fintech growth supported by national innovation initiatives.
• Banks play a central role in corporate and payroll compliance.
  (Source: economic policy framework in Malta Budget 2026 and sector analysis)

Working Week

• Standard workweek: 40 hours, typically 8 hours/day.
• Sectoral deviations may occur under Wage Regulation Orders (WROs).
  (Defined under Employment Law sources and DIER guidance)

Employment Law

Holiday Accrual / Calculations

• Annual leave entitlement (2026): 27 days (216 hours), based on 40-hour workweek.
  Includes 3 public holidays falling on weekends compensated with additional hours.

Maternity / Paternal Leave

• Maternity leave: 18 weeks (standard in Malta).
• Paternity leave: 10 days (EU minimum transposed).
• 2026 Budget discussions indicate potential future extension.

Sickness

Employees receive paid sick leave according to Wage Regulation Orders, with employer-liability for first weeks, after which social security covers benefits.

National Service

Malta has no national military service.

Labor Law

Major reforms effective 2025–2026 include:

• Miscarriage Leave Regulations (LN 274 of 2025) — 7 paid working days for miscarriage applicable to both parents.
• Employment & Industrial Relations Amendment Bill 2026 — new Article 29A prohibiting all forms of violence and harassment at work.
• Urgent Family Leave extended to 32 hours annually.

Tax & Social Security

Tax Rates (2026)

Personal Income Tax (PIT)

Malta applies progressive rates with the top rate of 35%.
Updated 2026 tax brackets include new family-oriented bands:

• Married with one child: 0% up to €17,500; 15% up to €26,500; 25% up to €60,000; 35% above.
• Married with 2+ children: 0% up to €22,500.
• Parent with one child: 0% up to €14,500; 15% up to €21,000; 25% up to €60,000; 35% above.
• Parent with 2+ children: 0% up to €18,500.
• Standard single/married/parent brackets remain unchanged unless qualifying for new bands.

Corporate Tax

• Standard corporate income tax rate: 35% (not modified in 2026 Budget, but refund system applies).

VAT

• Standard VAT: 18% (unchanged).

Social Security (N.I. Contributions)

Malta Class 1 SSC (employees) contributions for 2026:

• 10% employee + 10% employer based on basic weekly wage.
• Maternity Fund levy added separately.
• Fixed contributions for wages up to €229.44/week: €6.62 by employer and employee.
• Higher wage brackets contribute proportionally up to:
• €55.93 weekly max for earnings above €559.31/week.

Self-employed (Class 2) contributions increased moderately for 2026.

Minimum Wage 2026

According to DIER official figures for 2026:

• Age 18+: €229.44/week
• Age 17: €222.66/week
• Under 17: €219.82/week

Cost of Living Adjustment (COLA) added for 2026: €4.66/week.

Minimum monthly wages:

• €994.24 for 18+ workers.

Payroll

Employers must process:

• Monthly social security remittances.
• Monthly payroll tax withholdings.
• End-of-year forms (FS3 to employees, FS7 to authorities).
• 2026 COLA adjustments must be reflected in payroll.

Payroll adjustments impacted by new 2026 tax bands and minimum wage updates

Reporting (New Employees & Leavers)

Employers must:

• Register new employees with Jobsplus and Tax & Customs Authority.
• Enroll employees in social security and update FS4 forms to reflect new 2026 tax bands.
• Submit end-of-year reconciliation reports (FS3, FS7, ).

Employee Benefits

Mandatory benefits include:

• Social security (pension, sickness, maternity, unemployment benefits).
• Paid annual leave (27 days in 2026).
• Statutory bonuses: June and December bonuses.
• COLA increase (€4.66 weekly in 2026).

Visas & Work Permits

Non-EU nationals require work authorization.

Main Work Permits (2026)

1. Single Permit (standard work + residence) — processing up to 4 months.
2. Key Employee Initiative (KEI) — 5-day fast track; salary ≥ €45,000.
3. Specialist Employee Initiative (SEI) — mid-range skill fast track pathway.
4. EU Blue Card — for highly skilled professionals.
5. Nomad Residence Permit — remote workers (non-employed by Malta).

2026 New Requirements

• Mandatory Pre-Departure Course (€250, 20–24 hours).
• Skills Pass verification for certain roles.
• Stricter labour market testing (Jobsplus suitability checks).

General Steps

1. Employer performs labour market test (LMT).
2. Skills verification and documentation.
3. Identità submission and AIP letter issuance.
4. Embassy submission for D-visa.
5. Arrival in Malta and residence card issuance.

Key Changes for 2026

• New personal income tax bands for families with children.

• Updated Social Security contribution thresholds (higher wage caps).

• Increase in national minimum wage to €229.44/week for 18+.

• Miscarriage leave introduced (7 paid days).

• Extended urgent family leave – 32 hours.

• New workplace harassment protections (Article 29A).

• Mandatory Pre-Departure Course for non-EU worker applications.

• Digital transformation and AI upskilling initiatives introduced under Malta Budget 2026.