Malta’s employment landscape continues to evolve, and as we enter 2026, both employers and employees need a clear understanding of the rules that define hiring, working conditions and dismissal. Whether you are running a business, relocating to Malta or managing a multicultural workforce, staying informed about updated wage rules, leave entitlements and compliance standards is essential.
Malta’s legal framework aims to balance business needs with fair and transparent treatment for workers. Contracts must be clear, wages must meet legal requirements, and termination must follow defined procedures. With new obligations coming into force for 2026 — including bank-transfer salary rules for Third-Country Nationals (TCNs) and updated COLA adjustments — now is the right moment to revisit what the law expects.
Employment Contracts: The Foundation of Work in Malta
In Malta, every job must be based on a clear written contract that sets out the role, hours, pay and conditions. Contracts can be indefinite, which offer ongoing employment, or fixed-term, which run for a specific period. A fixed-term contract normally lasts at least six months and can be renewed, but only up to a four-year limit unless a valid reason is stated. After this point, the law treats the employment as indefinite.
Employment conditions also depend on the sector. Many industries follow Wage Regulation Orders (WROs), which set minimum standards for pay, working hours and leave. Where no WRO applies, the Employment and Industrial Relations Act (EIRA) sets the general rules.
Before You Sign: The Employment Contract Essentials in Malta
Employment Measures Carrying Into 2026: Wages, COLA and Payment Requirements
Several important updates introduced over the year 2025 will continue to shape employment practices throughout 2026. These measures focus on wage stability, cost-of-living support and greater transparency in how employees are paid. Understanding these requirements helps both employers and workers prepare for the year ahead.
1. Cost of Living Adjustment (COLA) for 2026
From 1 January 2026, the weekly COLA increase is €4.66 for full-time employees. This amount must be added to the weekly wage of every employee, including part-timers on a pro-rata basis.
2. Minimum Wage for 2026
The national minimum wage continues to increase gradually under Malta’s long-term wage improvement system. Full-time workers aged 18+ must receive at least the updated statutory minimum €221.78 weekly adding up cost-of-living (COLA) of €4.66. This ensures wages remain aligned with rising expenses.
3. Mandatory Bank Payments for TCN Workers
From 1 October 2025 onward, any employee who is a Third-Country National (non-EU national) must be paid exclusively via bank transfer or a licensed electronic method. Cash wages for TCNs are no longer allowed.
This rule strengthens transparency and reduces exploitation risks while ensuring compliance with labour and immigration regulations.
Employment Conditions and Leave Entitlements
Malta’s employment conditions provide a clear framework that protects both workers and employers, ensuring fairness and consistency across workplaces. These standards outline the minimum rights every employee must receive, regardless of industry, and help maintain an organised and transparent working environment.
Working Hours
In Malta, the standard full-time working week is 40 hours. These hours are usually spread over five days, unless a different arrangement is agreed in the employment contract.
Employees may work more than 40 hours in a particular week. However, the overall average cannot exceed 48 hours per week over a set reference period. To exceed the 48-hour average, the employee must give written and voluntary consent. Employers cannot force or pressure workers into signing this agreement, and employees have the right to withdraw their consent at any time.
Overtime pay depends on what is written in the employment contract or on the conditions applicable to the specific sector. Part-time employees, estimated for 20 hours a week, must always receive the same hourly rate as comparable full-time workers when they work beyond their normal contracted hours.
Vacation Leave in 2026
Full-time employees working a standard 40-hour week are entitled to 216 hours of paid annual leave, which equals 27 working days. This is made up of:
An additional 24 hours of leave because three public holidays in 2026 fall on a Saturday or Sunday, and each of these adds one extra day to the annual leave entitlement.
Part-time employees receive the equivalent entitlement on a pro-rata basis.
Up to 50 percent of unused leave may be carried forward with employer approval.
Sick Leave
In Malta, most employees are entitled to 12 days of fully paid sick leave and an additional 12 days of sick leave at half pay each calendar year. These days may be used whenever an employee is unwell and unable to attend work. To access sick leave, employees are generally required to provide a valid medical certificate, in line with their employer’s policy.
Once the full-pay and half-pay sick leave entitlement is exhausted, employees may still receive the standard social security sickness benefit directly from the state until they recover or return to work.
It is important to note that some industries, particularly industrial and labour-intensive roles, are covered by sector-specific rules that grant additional sick leave beyond the standard entitlement. For example, certain technical and heavy-duty occupations receive higher sick leave allocations due to the nature of their work and associated health risks.
Employees and employers should always refer to the contract and the applicable sector regulations to confirm the exact entitlement.
Parental and Maternity Leave
- Maternity leave totals 18 weeks, with the first 14 weeks fully paid by the employer and refunded through the national fund.
- Employers contribute 0.3 percent of basic wage toward the Maternity Leave Trust Fund.
- Additional parental leave rights apply depending on circumstances.
Termination and Dismissal Rules for 2026
Termination is regulated by the EIRA and overseen by the Department of Industrial and Employment Relations (DIER). DIER ensures procedures are fair and lawful.
Valid Reasons for Dismissal
- other legally recognised grounds
- redundancy
- serious misconduct
- inability to perform the job
Notice periods apply as follows:
- 1 week for employment between 1 and 6 months
- 2 weeks for 6 months to 2 years
- 4 weeks for 2 to 4 years
- 8 weeks for 4 to 7 years
- 9 weeks for 7 to 10 years
- 12 weeks for more than 10 years
Outstanding wages, stationary bonus pro-rata, and unused leave must always be paid.
DIER’s Role
The Department of Industrial and Employment Relations (DIER) plays a central role in overseeing fair and lawful employment practices in Malta. It ensures that terminations follow the correct legal procedures, checks that employees receive the proper notice, wages and leave entitlements, and provides guidance to both employers and workers on their rights and obligations. DIER may also investigate complaints, request documentation and intervene when regulations are not followed. Employees who believe they were dismissed unfairly can seek support from DIER or file a claim before the Industrial Tribunal within the set timeframe.
Looking Ahead to 2026
While no major legislative changes have been announced for 2026, several trends in 2025 shaped the employment environment:
- Stricter enforcement of working conditions, payroll compliance and TCN wage rules
- Growing emphasis on pay transparency, aligned with the EU’s Pay Transparency Directive
- Steady wage pressure in high-demand sectors such as tourism, ICT, healthcare and hospitality
- Continued focus on fair recruitment, including written terms, clear onboarding and well-defined duties
- A more structured approach to remote and hybrid roles, responding to modern workplace expectations
Employers should review contracts, payroll setups and HR records.
Employees should stay informed about rights, leave entitlements and contract conditions.
Final Thoughts
As we move slowly into 2026, Malta’s employment framework aims to offer clarity, predictability and fairness. Whether you are hiring, starting a new job or planning your long-term career here, understanding these rules will help you navigate the workplace with confidence.
If you need help reviewing contracts, updating policies or ensuring your business is compliant for the new year, our team at Expatax Malta is ready to assist.
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