The Cost of Hiring in Malta: A 2026 Worked Example

The cost of employing someone in Malta is the gross salary plus a capped employer social security contribution and a small Maternity Leave Trust Fund levy. In 2026 those statutory on-costs add a little over 10% to pay at modest salaries, and far less once pay passes about €29,084 a year, because the contribution is capped.

It helps to think of the cost in three layers. The first is gross pay, which in Malta includes the cost of living adjustment (COLA) and the statutory bonuses. The second is the employer’s statutory contributions. The third is everything the law does not require but most employers pay anyway: benefits, equipment, recruitment and the cost of running payroll and compliance.

• Gross salary, including COLA and €512.52 in statutory bonuses for 2026
• Employer Class 1 social security: 10%, capped at €55.93 a week
• Maternity Leave Trust Fund: 0.3%, capped at €1.68 a week
• Optional costs: health insurance, equipment, training, and an EOR or entity overhead

Malta also has no statutory severance pay, which keeps the calculation short. With Employer of Record Malta, the only addition is a flat monthly fee, so the full cost of a hire can be set out before the offer goes out.

A Maltese employer pays Class 1 social security at 10% of the employee’s basic weekly wage, up to a weekly cap. For employees born in 1962 or later, the employer’s share stops rising once weekly pay passes €559.30, and is fixed at €55.93 a week above that point. That threshold is about €29,084 a year.

The cap is what makes Malta cheap to employ in at higher salaries. An employer pays the same €55.93 a week, or €2,908.36 across 52 weeks, whether the employee earns €35,000 or €135,000. For employees born up to 31 December 1961, the cap is lower still, at €49.04 a week.

Below the cap the full 10% applies. Take the average basic salary in Malta, which was €2,270 a month, about €27,240 a year, in the first quarter of 2026. Assuming 52 contribution weeks, the weekly wage is under the cap, so the employer pays 10%, around €2,724 a year, plus a Trust Fund levy of roughly €82.

The employer also pays the Maternity Leave Trust Fund levy of 0.3%, capped at €1.68 a week for Category D employees born in 1962 or later. The rates are set out in full in the MTCA contribution tables for 2026.

A €70,000 salary in Malta costs the employer €72,995.72 in 2026 before any EOR fee or benefits. The example uses these assumptions: the employee is single and resident in Malta, taxed under the single computation, born after 1962, the €70,000 includes the statutory bonuses and COLA, and there are 52 contribution weeks in the year.

The weekly wage is €70,000 divided by 52, or €1,346.15. That is above €559.31, so Category D applies and contributions are capped.

• Employee social security: €55.93 × 52 = €2,908.36
• Employer social security: €55.93 × 52 = €2,908.36
• Maternity Leave Trust Fund, employer only: €1.68 × 52 = €87.36
• Total employer cost: €72,995.72, an on-cost of about 4.3%

Income tax under the single computation is €15,100. By band, that is nothing on the first €12,000, 15% on the next €4,000 (€600), 25% on the next €44,000 (€11,000) and 35% on the final €10,000 (€3,500). The shortcut gives the same answer: €70,000 × 35% less €9,400. Employee social security is not deductible for tax.

Net pay is €70,000 less €2,908.36 less €15,100, which is €51,991.64 a year, or about €4,332.64 a month. Total deductions come to around 25.7% of gross. If the role qualifies under the Highly Skilled Individuals rules, with a 15% flat rate for eligible roles paying at least €65,000, tax would be €10,500 and net pay about €56,591.64. Eligibility depends on the sector, experience and qualifications, so confirm it before quoting that figure to a candidate.

Paid leave and statutory payments are part of the salary cost in Malta, and most of them are already inside the gross figure. Annual leave is 192 hours for a full-time employee, and in 2026 it rises to 216 hours, or 27 days, because three public holidays fall on a weekend. Malta also has 14 public and national holidays.

Where no Wage Regulation Order sets sick leave, employees are entitled to at least two working weeks a year on full pay, less any sickness benefit they receive from the Department of Social Security. Injury leave can run for up to a year on full pay, less injury benefit.

Family leave costs less than it first appears. Maternity leave is 18 weeks. The employer pays the first 14 and can reclaim the basic wage, the pro-rata statutory bonuses and its own social security for those weeks from the Maternity Leave Trust Fund. The second parent’s 10 working days of paid leave after a birth or adoption are also refundable from the fund. The remaining weeks of maternity leave are paid by the state.

Statutory bonuses of €512.52 and COLA of €242.32 a year are paid to every employee. If the contract states that salary is inclusive of them, they add nothing to the budget. If it does not, add them on top.

Beyond salary and social security, the costs of a Maltese hire are mostly the ones any employer chooses to carry. Private health insurance, a pension top-up, a laptop and phone, training and a recruitment fee are the usual items. None of them is set by law, so they vary with the role and the market.

Remote workers bring a specific cost. Under the Telework National Standard Order, the employer provides and maintains the equipment a teleworker needs unless the parties agree otherwise. Budget for that at the offer stage.

Overtime can also add up in hourly roles. Most Wage Regulation Orders set time and a half, and the first €10,000 of qualifying overtime is taxed at 15% for the employee. For non-EU hires, the Single Permit application costs €600, with €150 for each renewal.

For a small team, an Employer of Record usually costs less than running your own Maltese company, because the entity carries fixed costs whether you employ one person or ten. The salary and social security are the same either way. The difference is the overhead.

A Maltese private limited company needs authorised share capital of at least €1,164.69, with 20% paid up, and a Malta Business Registry fee from €100 online. After that come a company secretary, a registered office, accounting, payroll and a statutory audit every year, since audited financial statements are required for all Maltese companies. Those running costs typically reach the low thousands of euros a year, so get quotes before deciding. The time to first payroll is often 4–12 weeks.

An EOR replaces all of that with a monthly fee. Ours starts from €499 per employee per month, with the details on our pricing page. List prices at the larger global providers for Malta are typically between $599 and $699 a month, so it is worth asking any provider about deposits, currency margins and offboarding fees. For a side-by-side view, read our comparison of an employer of record vs a Maltese company, and if you are budgeting in dollars, our guide to US vs Malta employer costs.