Employer of Record (EOR) in Malta
An EOR in Malta allows businesses to enter the market quickly and maintain compliance with local labor, tax, and social security laws, without the overhead of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment, from payroll processing and statutory contributions to compliant contract administration.
Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in Malta.
Quick Overview of EOR in Malta
Expanding into Malta does not have to mean navigating a complex web of local regulations or absorbing the costs of a new legal entity. With an Employer of Record (EOR), you can hire employees in Malta quickly and compliantly, without setting up a Maltese company. The EOR becomes the legal employer for tax, payroll, and social security purposes, handling everything from employment contracts and Class 1 social security contributions to income tax withholding under Malta's Final Settlement System, while you retain full operational control over your team.
The EOR model offers a low-risk, cost-effective alternative to establishing a local subsidiary. Incorporating in Malta involves legal fees, registration expenses, ongoing corporate administration, and the overhead of maintaining local payroll infrastructure. By partnering with an EOR, you enter the market faster, avoid that fixed-cost base, and convert employment administration into a variable cost that scales with headcount. This is especially beneficial for organizations testing the Maltese market, building small remote teams, or deploying staff quickly for time-sensitive projects.
How an EOR Works
Atlas HXM provides EOR services that ensure your business remains compliant with Malta's labor laws while you focus on growing your operations, free from administrative and legal burdens.
Candidate Selection
Atlas HXM does not recruit candidates, but will check the employment setup for compliance around new hires, such as validating right-to-work documentation, reviewing contract terms against Maltese requirements, and configuring payroll and statutory obligations correctly from day one.
Employment Contracts
Atlas HXM drafts and administers employment contracts in compliance with Maltese labor law, including the Employment and Industrial Relations Act and applicable Wage Regulation Orders. Contracts clearly outline employment terms to reduce the risk of future disputes, such as:
Job title and responsibilities
Salary, statutory bonuses, weekly allowances, and working hours
Leave entitlements, probation period, and notice periods
Payroll & Benefits Management
Payroll is processed in euros (EUR), including:
Accurate income tax withholding under the Final Settlement System and Class 1 social security contributions
Statutory bonuses of EUR 135.10 paid at the end of June and again from 15 December to 23 December, and weekly allowances of EUR 121.16 paid at the end of March and at the end of September
The EOR also ensures compliance with all mandatory employment entitlements, so employees are fully protected under Maltese law.
Ongoing HR Support
Atlas HXM provides HR support throughout the employee lifecycle, including leave management, employee relations, and regulatory updates. This allows businesses to focus on core operations while Atlas HXM handles ongoing compliance with Maltese employment legislation.
What to Choose: EOR vs PEO
Work Life in Malta
Malta's employment framework is built around strong statutory protections and a layered legislative structure. Here is what you need to know.
Employment Types:
Indefinite (Permanent): Ongoing employment with full statutory entitlements and protection under the Employment and Industrial Relations Act.
Fixed-Term (Definite): Hired for a specified duration, with the same wage entitlements as indefinite employees. Fixed-term contracts may not exceed four years in aggregate, after which the employee is treated as employed under an indefinite contract.
Probation Periods: Under indefinite contracts, the standard probationary period is six months, unless the parties agree to a shorter period. For employees in technical, executive, administrative, or managerial positions earning at least double the national minimum wage, probation extends to one year unless a shorter period is agreed.
For fixed-term contracts, probation must be proportionate to the contract term. During probation, either party may terminate without giving a reason, but one week of notice is required if the employee has been continuously employed for more than one month.
Working Hours & Overtime: In Malta, normal full-time hours are generally based on a 40-hour working week. The maximum working time, including overtime, is an average of 48 hours per week, calculated over a 17-week reference period. Employees must consent in writing to work beyond the 48-hour average, and that consent may be withdrawn.
Where no Wage Regulation Order applies, overtime is paid at one and a half times the normal rate for work in excess of a 40-hour week, averaged over a four-week period. Pregnant employees and those within 12 months of birth or adoption cannot be obliged to work overtime.
Leave Entitlements
Leave Type | Eligibility / Duration | Payment / Notes |
|---|---|---|
Annual Vacation Leave | Minimum 192 hours per year for a 40-hour worker (216 hours in 2026 for a Monday–Friday schedule) | Fully paid; up to 50% may be carried forward by agreement. A minimum of 160 hours cannot be replaced by a cash allowance during employment. |
Maternity Leave | 18 weeks uninterrupted; 6 weeks must follow confinement | First 14 weeks paid by employer; additional weeks may attract Social Security benefit |
Paternity Leave | 10 working days, taken immediately after birth or adoption | Paid, without loss of wages; no service qualification required |
Sick Leave | Two working weeks per year where no Wage Regulation Order applies | Paid by employer up to statutory entitlement; medical certificate required. Social Security sickness benefit may apply thereafter. |
Public Holidays | 14 paid holidays per year under the National Holidays and Other Public Holidays Act | Full pay; where a holiday falls on a rest day, an equivalent day is added to vacation leave |
Payroll & Benefits: Wages in Malta are paid in euros. The national minimum wage for whole-time employees aged 18 and over is EUR 229.44 per week (2026). Statutory bonuses of EUR 135.10 are paid at end of June and from 15 December to 23 December. Statutory weekly allowances of EUR 121.16 are paid at end of March and at end of September.
Atlas HXM manages payroll in EUR, including social security contributions, income tax withholding, and all statutory bonus and allowance payments. Supplemental benefits, which are not mandated by law but common in competitive sectors, can include private health insurance, meal allowances, transport subsidies, and training budgets.
Atlas HXM helps manage these aspects, ensuring that employees are supported and compliant with Maltese labor law, while businesses can focus on operations without administrative burdens.
What to Choose: Indirect vs Direct EOR
Taxes & Compliance
Malta operates under the Final Settlement System (FSS) for employer income tax withholding. Employers deduct income tax and social security contributions from employees' wages monthly and remit both to the Commissioner for Revenue using the FS5 monthly payment advice, due by the end of the month following the month in which wages were paid. The employer's annual end-of-year reconciliation, including FS3 statements for employees and the FS7 reconciliation form, must be completed by 15 February of the following year.
Category | Details |
|---|---|
Employer Payroll Contributions | Class 1 social security contributions based on the employee's basic weekly wage. For employees born from 1 January 1962 onwards earning EUR 229.45–EUR 559.30 per week: employer contributes 10%, plus a 0.30% maternity contribution. Contributions are capped at EUR 55.93 per week above EUR 559.30. |
Employee Payroll Contributions | Class 1 social security contributions at 10% of basic weekly wage (same category bands as employer). Employees earning up to EUR 229.44 per week may opt for a pro-rata rate. Personal income tax withheld under progressive bands depending on single, married, or parent status. |
Pension System | Contributory state pension underpinned by Class 1 social security contributions. Retirement age is 65. Each year of insurable employment generates 52 or 53 weekly contributions depending on the number of Mondays in that year. |
Employee Income Tax Rates (2026)
Status | Chargeable Income From (EUR) | Chargeable Income To (EUR) | Rate (%) | Subtract (EUR) |
|---|---|---|---|---|
Single | 0 | 12,000 | 0 | 0 |
Single | 12,001 | 16,000 | 15 | 1,800 |
Single | 16,001 | 60,000 | 25 | 3,400 |
Single | 60,001 | and over | 35 | 9,400 |
Married | 0 | 15,000 | 0 | 0 |
Married | 15,001 | 23,000 | 15 | 2,250 |
Married | 23,001 | 60,000 | 25 | 4,550 |
Married | 60,001 | and over | 35 | 10,550 |
Parent | 0 | 13,000 | 0 | 0 |
Parent | 13,001 | 17,500 | 15 | 1,950 |
Parent | 17,501 | 60,000 | 25 | 3,700 |
Parent | 60,001 | and over | 35 | 9,700 |
VAT & EOR Costs: EOR services are typically treated as business-to-business service supplies for Maltese VAT purposes and are generally subject to the standard VAT rate. VAT appears on invoices from the EOR to the client organization and is separate from payroll taxes and social security contributions. Depending on the client's own VAT registration status and business activities, input VAT on EOR service fees may be recoverable.
Atlas HXM handles tax compliance including progressive income tax calculations, social security contributions, year-end filings, and statutory reporting, ensuring businesses remain compliant with Maltese law while minimising administrative burden.
Termination
For indefinite contracts beyond probation, notice periods are based on the employee's continuous length of service. Statutory notice ranges from one week to twelve weeks as follows:
More than one month and up to six months: one week
More than six months and up to two years: two weeks
More than two years and up to four years: four weeks
More than four years and up to seven years: eight weeks
More than seven years: one additional week per subsequent year of service or part thereof, up to a maximum of twelve weeks
Longer notice periods may be agreed for technical, administrative, executive, or managerial roles. If the employer prevents an employee from working their notice, the employer must pay full wages for the unexpired notice period. If the employee chooses not to work notice on receiving it from the employer, the employer pays half the wages for the unexpired period.
For fixed-term contracts terminated without justified reason after probation, the breaching party must pay the other party half the full wages that would have accrued for the remaining term. Malta does not prescribe a universal statutory severance formula beyond notice entitlements, but employees are entitled on termination to proportional payment for all outstanding wages, overtime, leave, bonuses, and allowances. Outstanding remuneration must be settled by the next pay date following termination.
Collective redundancy rules apply when redundancies over a 30-day period reach defined thresholds: 10 or more employees in establishments of 20–99 employees; 10% or more in establishments of 100–299 employees; or 30 or more in establishments of 300 or more employees. Structured consultation and notification to employee representatives and the Department of Industrial and Employment Relations (DIER) are required. Non-compliance carries fines per employee declared redundant. An employee dismissed for redundancy must be re-engaged if the former post becomes available within one year, and unfair dismissal claims must be lodged before the Industrial Tribunal within four months.
The EOR manages the full termination process, including notice period calculations, final pay, outstanding leave and bonus entitlements, deregistration from Jobsplus and social security systems, and required documentation, ensuring orderly and compliant employment exits.
5 Things to Look for in an EOR Provider in Malta
In-depth knowledge of Maltese labor law, including the Employment and Industrial Relations Act, Organisation of Working Time Regulations, Wage Regulation Orders, and social security contribution rules.
Advanced technology for payroll processing in EUR, statutory reporting under the Final Settlement System, and integration with your global HR systems.
Experience supporting employers in Malta across sectors, including those subject to specific Wage Regulation Orders or regulatory licensing requirements.
A strong compliance track record, with established relationships with Maltese authorities including Jobsplus, the Commissioner for Revenue, and the DIER.
Global presence to support multi-country expansion, with verified security and compliance standards such as ISO 27001, GDPR alignment, and transparent data protection practices.
Atlas HXM provides Direct EOR services, managing payroll, compliance, and benefits efficiently. Atlas HXM's unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2026, Atlas HXM combines compliance, technology, and global expertize.
FAQs
How quickly can I hire employees in Malta through an EOR?
Because the EOR is already registered as an employer in Malta, onboarding can begin as soon as contracts are drafted and documentation is collected. For eligible workers, this typically takes a matter of weeks. For third-country nationals requiring a Single Permit, processing by Identità may take up to four months, so early planning is essential.
What is the minimum wage in Malta?
The national minimum wage for whole-time employees aged 18 and over is EUR 229.44 per week (2026 revision). Age-specific rates apply for employees aged 17 (EUR 222.66 per week) and under 17 (EUR 219.82 per week). Certain sectors have higher minima set by Wage Regulation Orders.
Are there restrictions on terminating employees in Malta?
Yes. Maltese law requires statutory notice periods based on length of service, correct calculation and payment of outstanding entitlements, and compliance with collective redundancy consultation procedures where applicable. Unfair dismissal claims may be brought before the Industrial Tribunal within four months of termination.
How do statutory bonuses work in Malta?
Malta does not have a 13th-month salary requirement. Instead, employees receive a statutory bonus of EUR 135.10 paid at the end of June and again from 15 December to 23 December, plus a statutory weekly allowance of EUR 121.16 paid at the end of March and at the end of September. These are mandatory payments, not discretionary, and are pro-rated for employees who do not work the full relevant period.
What are the main employer payroll contributions in Malta?
Employers pay Class 1 social security contributions based on the employee's basic weekly wage. For employees born from 1 January 1962 onwards earning EUR 229.45–EUR 559.30 per week, the employer contributes 10% plus a 0.30% maternity contribution. Contributions are capped above EUR 559.30 per week. Employers are also responsible for remitting income tax withheld under the Final Settlement System.
What is the standard annual leave entitlement in Malta?
Every employee on a 40-hour week is entitled to a minimum of 192 hours of paid annual vacation leave per year (216 hours in 2026 for a Monday–Friday schedule, accounting for public holidays falling on rest days). A minimum of 160 hours cannot be replaced by a cash payment during employment. Up to 50% of entitlement may be carried forward by agreement with the employer.
Who controls day-to-day work in an EOR arrangement?
The client company directs the employee's daily work, sets performance goals, and manages projects. The EOR manages the legal and administrative aspects of employment, including payroll, compliance, and HR documentation. Performance management, promotions, and disciplinary decisions are driven by the client, with the EOR translating those decisions into compliant processes under Maltese law.
What happens if we later decide to incorporate in Malta?
If you decide to establish a Maltese entity and employ staff directly, Atlas HXM can support the transition. This involves registering the new entity with Jobsplus and the Commissioner for Revenue, transferring employees via new employment contracts, and ensuring that accrued entitlements such as length of service, leave balances, and statutory rights are properly accounted for. Careful planning ensures compliance and minimizes disruption throughout the process.