Hiring in Malta looks simple until the first payroll run and leave request land on your desk. Then the local details matter fast, because tax withholding, social security, and leave wording all need to match Maltese rules.
That is why many growing companies use a Malta employer of record. It gives you a local employment setup without opening a Maltese entity, which is useful when you’re testing the market or adding one key hire.
Why companies use a Malta employer of record
A Malta employer of record hires the worker locally on your behalf, while you manage the employee’s day-to-day work. This setup is popular with startups, remote teams, and scale-ups that want speed without taking on entity costs too early.
In Malta, that matters because payroll is not only about sending money each month. You also need the right contract terms, PAYE withholding, social security setup, leave accrual, and employer filings. Sector rules can also affect working time, sick pay, and other conditions, as outlined in Eurofound’s Malta employment relations profile.
A strong provider reduces that admin load. Expandbase is one example. It helps companies hire in 150+ countries without setting up local entities, and its model fits Malta well. The value is practical: guided onboarding, locally compliant contracts, payroll in local currency, automated deductions, payslips, benefits setup, and records that stay ready for finance and HR review.
That speed matters when you’re hiring a sales lead, a remote engineer, or a short-term project team. Based on Expandbase’s operating model, onboarding can move from contract creation to digital document collection and then to first payroll in days, not months. For companies that don’t want hidden fees or long lock-ins, that is often the difference between a clean launch and a messy one.
Malta payroll rules for 2026
Payroll in Malta runs through PAYE, so employers withhold income tax directly from salary. Social security also applies to both the employer and employee, and both sides usually contribute 10%, subject to the Class 1 cap.
These are the figures most employers should check first.
| Payroll item | 2026 rule | Why it matters | | | | | | Minimum wage | EUR229.44 per week for workers aged 18+ | Sets the floor for salary offers | | COLA increase | EUR4.66 per week from 1 January 2026 | Existing payroll rates may need an update | | Social security | 10% employee, 10% employer, capped | Affects total employment cost | | PAYE tax | Rates vary by status | Drives net pay calculations |
For single resident taxpayers, the 2026 bands reported in current payroll updates are 0% up to EUR12,000, 15% from EUR12,001 to EUR16,000, 25% from EUR16,001 to EUR60,000, and 35% above EUR60,000. Married employees and parents use different bands, so payroll cannot rely on one standard setup for everyone. Part-time income can also receive a 10% rate up to a qualifying threshold, which adds another layer.
Malta also expects employers to handle registrations and employment notifications correctly. The Jobsplus employer knowledge base and forms are part of that process for engagement and termination reporting. For a broader payroll compliance summary, the DW&P Malta payroll guide is a useful reference.
Most foreign companies feel the pressure in the details. Salary must usually be processed monthly, in euro, with clear payslips and accurate logs. If you hire through an EOR, those steps are normally built into the service. Expandbase, for example, positions this as pre-configured taxes and benefits, local-currency payroll, automatic payslips, and synced records across HR and finance. That cuts down manual work and lowers the odds of fixing errors after payday.
Malta leave rules that trip up foreign employers
Leave is where many overseas employers copy the wrong template. Malta does not treat every leave type the same, and some rules depend on sector orders or collective agreements.
Annual leave is commonly tracked in hours, not only days. For many full-time employees on a 40-hour week, the base statutory entitlement is generally 192 hours per year, with pro rata treatment for part-time staff. That sounds simple, but yearly totals can shift because Malta has rules tied to public holidays that fall on weekends. As a result, employers should confirm the current annual figure before issuing offers and policies.
The biggest leave risk is not underpaying salary, it is using a leave policy that ignores Maltese sector rules.
Sick leave needs extra care because there is no one-size-fits-all number across every industry. The employee’s sector and the relevant Wage Regulation Order can affect entitlement and pay. A contract that simply says “global policy applies” is asking for trouble.
Maternity leave also needs local handling. Malta provides a statutory maternity entitlement, commonly treated as 18 weeks, and payroll treatment may split between employer-paid and state-supported portions. Public holidays, vacation accrual during protected leave, and return-to-work timing should all match local requirements.
This is where a Malta employer of record earns its keep. A provider should not only process payroll, but also set leave balances correctly, apply pro rata accrual, keep compliant records, and update policies when local rules shift. Expandbase is a sensible option for companies that want that support without building a Malta entity first.
Malta is a strong hiring market, but the admin side rewards precision. Get payroll and leave right from day one, and your first hire in Malta feels like growth, not risk.
For most companies, the smartest move is simple: use local employment rails from the start. A good Malta employer of record keeps contracts, payroll, and leave aligned while you focus on the work your new hire was brought in to do.
