Contract Types

In Malta contracts can be Fixed Term or Indefinite. Fixed Term contracts can be for a minimum of 6 months.  If a Fixed Term contract is renewed there can be no new probation period. Fixed Term contracts can generally be for a maximum of 4 years including all renewals. A new Fixed Term contract should be provided within 12 days of expiration of the old contract, or the employee will be deemed to be on an indefinite contract.

Probation

For Fixed Term contracts between 6 and 15 months, the probation period is 2 months for every 6 months of the contract’s duration. Over 15 months, the probation period is 6 months. For executive positions where the salary is at least double the minimum wage, probation can be 12 months.

Working Hours

The normal working week is 40 hours, 8 hours per day

Overtime            

Generally, overtime arrangements are covered by the Wage Regulation Order (WRO). If there is no WRO then payment of 150% of usual salary is due. Overtime is limited to 2 hours per day and must be approved. Total hours cannot exceed 48 hours per week or 250 hours per year. There is no regulation governing overtime rates except that it must exceed salary by 10% and should be agreed in the contract between the employer and employee. The number of hours worked should be stated on the payslip. The entitlement to overtime hours is worked over a 4-week average, i.e. over 4 weeks hours must average above 40 per week in order to qualify for overtime. For senior positions the contract can specify that salary includes all overtime.

Other   

Employees are entitled to government bonuses (approximately Euro 500 pa) and cost of living increases as may be announced from time to time by the government. A 13th month salary is common.

Should the employer want to perform background checks, the employee must be informed.

Non-compete clauses are allowed in Malta so long as they are reasonable and limited in scope, and the employer is not obliged to provide compensation in return.

Tax rates valid for: 2024

Corporation Tax: 35%   

Consumption Tax: 18% 

Employers’ Social Security: 10%

Employees’ Contributions: 10% 

Capped at EUR 53.23 per week for those earning over 27,679

Income Tax Rates           

• Up to 9,100 EUR – 0%
• 9,100 to 14,500 EUR – 15%
• 14,500 to 19,500 EUR – 25%
• 19,500 to 60,000 EUR – 25%
• Over 60,000 EUR – 35%

The above rates are for single employees; the rates are different for married employees and for those with children. 

Notice

In Malta all contracts can be terminated for reasons of gross misconduct, or for business or personal reasons. Notice must be given in writing and the reasons explained. The notice period will vary according to the length of service:

• Less than 1 month – no notice required
• 1 – 6 months – 1 week
• 6 – 24 months – 2 weeks
• 2 – 4 years – 4 weeks
• 4 – 7 years – 8 weeks
• Over 7 years – 1 additional week per year of service up to 12 weeks

Payment in lieu of notice is allowed. Should the employee be required to work his notice and chooses not to, then he is entitled to only 50% of the salary which would have otherwise applied for that period.

During Probation

1 week notice is required after 1 month of employment.

Severance Pay  

There are no provisions for severance pay under Maltese law. However, it is common for a severance payment to be agreed. Accrued and unused leave should always be paid out.

National Public Holidays: 14

New Year’s Day – 1st January

Day Given in Lieu

Feast of St Paul’s Shipwreck – 10th February

Day Given in Lieu

Feast of St Joseph – 19th March

Day Given in Lieu

Good Friday – 29th March

Day Given in Lieu – N/A

Freedom Day – 31st March

Day Given in Lieu

Labour Day – 1st May

Day Given in Lieu

Sette Giugno – 7th June

Day Given in Lieu

Feasts of St Peter and Paul – 29th June

Day Given in Lieu

Assumption of the Blessed Virgin Mary – 15th August

Day Given in Lieu

Feast of Our Lady of Victories – 8th September

Day Given in Lieu

Independence Day – 21st September

Day Given in Lieu

Immaculate Conception Day – 8th December

Day Given in Lieu

Republic Day – 13th December

Day Given in Lieu

Christmas Day – 25th December

Day Given in Lieu

Annual Leave

All leave entitlement is based on a 5-day working week. Public holidays falling on a Sunday are not included. The number of days quoted are working days unless stated otherwise.

Paid legal entitlement (working days)

In Malta all employees are entitled to 24 days per year in addition to public holidays. Leave is calculated in hours (192 hours based on an 8 hour day). Holidays are prorated in the first year of employment. When public holidays fall at the weekend employees can take a day in lieu.

Carry over permitted

Up to 50% of leave may be carried forward to the following holiday year if there is an agreement with the employer. Leave cannot be paid out so employers should make every effort to encourage their staff to take their entitlement.

Timings

The holiday year starts on January 1st.

Payment in lieu allowed              

Payment cannot be made for 20 days of holiday except in case of termination.

Sick       

Sick leave is usually covered by the WRO in place and is typically 15 days, paid by the employer. Where there is no WRO in place, employees are entitled to 3 days fully paid sick leave per year before being entitled to sick benefit from the Social Security. Leave continues to accrue whilst on sick leave. Social Security funded sick pay can extend up to 156 days, or 468 days in 2 years with medical dispensation.

Maternity

New mothers are entitled to 14 weeks of maternity leave, 8 weeks before the birth and a minimum of 6 weeks after the birth paid by the employer. For a further 4 weeks employees can take leave and claim Eur 192.73 per week from the government. Leave continues to accrue during maternity leave, as do public holidays.

Pregnant employees are also entitled to paid time off to attend ante natal appointments.

An employee should return to work for a minimum of 6 months after maternity leave else she could be liable to repay the maternity pay.

Paternity            

New fathers (or other second parents) are entitled to 10 day’s paid leave immediately after the birth.

Parental             

Up to 4 months’ paid parental leave may be taken until the child is 8 years old. This is available for new parents as well as adopting parents, fostering parents or for general care. 2 months’ pay is funded by Social Security for each parent at the same rate as for sick leave.

Study   

Employees with at least 5 years’ service may request a maximum of 11 months unpaid leave to attend an educational establishment.

Marriage

Two working days if the WRO does not specify otherwise. Up to 15 days of paid leave is often given.

Bereavement    

Employees are entitled to paid leave of 1 working day for the death of a spouse or second degree relative, unless the WRO specifies more.

Other   

Other types of leave will be agreed in the WRO and employees have a right to continuous or discontinuous leave of up to two years for serious, documented family reasons.

Medical              

Malta has a well-regarded free public health system. Nevertheless, some competitive employers will offer private medical insurance to cover costs of items such as dental and optical services.

Other

Items such as gym membership, funding for courses and therapy allowances are increasingly offered in Malta.