Your Complete Guide to Employee Benefits Compliance in Malta

Malta has become a prime destination for international workers and employers, thanks to its favorable policies and high standard of living. The island nation offers a robust welfare system and a thriving business environment, making it essential for employers to familiarise themselves with employee benefits to ensure compliance and attract top talent.

What Are Employment Benefits?

Employment benefits refer to the additional income and entitlements provided to employees beyond their regular salary. These benefits can be statutory (legally required) or supplementary (offered voluntarily by employers). They are designed to enhance job satisfaction, promote well-being, and ensure financial security. In Malta, employment benefits are regulated by local laws and EU directives, providing a robust framework for worker welfare.

Employee Benefits in Malta: An Overview

Malta offers a range of statutory and supplementary benefits to employees, making it an appealing destination for both workers and employers. These benefits are regulated by Maltese law and EU directives, ensuring a high standard of worker welfare.

Statutory Employee Benefits

1. Annual Leave:
   • Full-time employees working 40 hours per week are entitled to 24 working days (192 hours) of paid leave annually. In 2025, additional 4 working days (32 hours) are granted to account for public holidays that fall on weekends.
   • Employees may carry forward up to 50% of unused leave to the following year, subject to employer agreement.
2. Parental Leave:
   • Maternity Leave: 18 weeks, with the first 14 weeks fully paid by the employer. The government provides a maternity benefit for the final four weeks at a national minimum wage rates.
   • Paternity Leave: 10 working days, to be taken immediately after the birth or adoption of the child.
   • Unpaid Parental Leave: Up to four months, available until the child reaches eight years of age.
3. Retirement and Pension Contributions:
   • Malta’s social security system comprises the Contributory and Non-Contributory Schemes, offering protection against unemployment, illness, and retirement risks.
   • Contributions are mandatory for all employees and ensure universal coverage.
4. Overtime:
   • Standard working hours are 40 per week, with a maximum of 48 hours over a 17-week period (if agreed voluntarily).
   • Overtime is compensated at 150% of the regular hourly wage and it is taxable income.
5. Benefits for Atypical Working Hours:
   • Employees working outside standard hours, such as night shifts or irregular schedules, are entitled to additional allowance – In-Work Benefit for Employees with Atypical Working Hours as stipulated by Maltese labor laws.
   • Employers must ensure proper compensation to support the well-being of employees with non-standard working hours.
6. Health Insurance:
   • The National Health Service provides healthcare for residents, funded through national insurance contributions.
   • Non-EU employees are required to contribute to the national insurance scheme to access these services.
7. Unemployment Benefits:
   • To qualify, individuals must have at least 50 weeks of contributions in the past two years.
   • Additional provisions are available for single parents and low-income households.

Additional Benefits to Enhance Employee Satisfaction

Employers in Malta often offer supplementary benefits to remain competitive and attract top-tier talent. These include:

• Private Health Insurance: Enhances coverage beyond the national system, including dental and vision care.
• Flexible Work Hours: Supports work-life balance and accommodates remote or hybrid work arrangements.
• Home Office Support: Stipends for utilities and equipment to facilitate remote work.
• Relocation Assistance: Travel and housing allowances for employees relocating to Malta.
• Professional Development: Budgets for training, mentorship programmes, and personal growth opportunities.

Ensuring Compliance with Maltese Laws

Employers must carefully classify workers as either employees or contractors to avoid penalties. Full-time employees are entitled to all statutory benefits, and misclassification can lead to fines and legal consequences. Employers should seek guidance to manage their obligations effectively.

Managing Benefits for Global Teams

Administering benefits for an international workforce can be challenging. Partnering with an employer of record (EOR) simplifies this process by ensuring compliance with local labor laws, managing payroll, and providing tailored benefits packages.

Conclusion

Malta’s employee benefits system offers a comprehensive range of advantages, from social security and health coverage to retirement plans and paid leave. By understanding and adhering to these benefits, employers can ensure compliance with local regulations while fostering a motivated and secure workforce. This approach not only helps attract and retain talent but also strengthens the overall employee-employer relationship in Malta. Expatax is here to assist and guide you through the latest compliance requirements, so be sure to follow us and check out more related articles.

Read Next: Social Security Contributions in Malta

Sources:

DIER

LEĠIŻLAZZJONI MALTA

Servizz.gov