Malta Payroll Adjustments & Employee Benefits for 2023 – FAQ’s

L.N. 334 of 2022 addresses the National Minimum Wage related to a normal working week shall be increased as follows, with effect from 1st January 2022.

• Aged 18 years and over – € 192.73 per week
• Aged 17 years – € 185.95 per week
• Aged below 17 years – € 183.11 per week

The national minimum wage of part-time employees shall be calculated pro-rata at the same hourly rate of a comparable whole-time employee as applicable in accordance with the minimum wage of the relevant Wages Council Wage Regulation Order, or in cases where a Wages Council Wage Regulation Order is not applicable, at an hourly rate not below the National Standard Minimum Wage applicable, as determined in accordance with the preceding paragraph and divided by forty (40). Wages Council Wage Regulation Orders. Cap. 452.

Where any Wages Council Wage Regulation Order applies to any employee, the wages payable to such employee in respect of the year 2023 shall not be less than those laid down by such Wages Council Wage Regulation Order, applicable for the year 2023 adjusted for cost of living by any increases of wages declared to be generally applicable to all whole-time employees in terms of article 8 of the Employment and Industrial Relations Act, or by any wage increases for cost of living laid down by any National Standard Order applicable in respect of the year 2023.

Employees who are on the minimum wage and have been in employment with the same employer for more than a year will have their wages adjusted, upon the completion of one or two years in employment, in accordance with the National Agreement on the Minimum Wage.

Number of Public Holidays that Fall on a Weekday: 12
Number of Public Holidays that Fall on a Weekend: 2
Total Public Holidays in Malta for 2023: 14

1. Sunday 1st January – New Year’s Day
2. Friday 10th February – Feast of St Paul’s Shipwreck
3. Sunday 19th March – Feast of St Joseph
4. Friday 31st March – Freedom Day
5. Friday 7th April – Good Friday
6. Monday 1st May – Workers’ Day
7. Wednesday 7th June – Sette Giugno
8. Thursday 29th June – Feast of St Peter and St Paul
9. Tuesday 15th August – Feast of the Assumption
10. Friday 8th September – Victory Day
11. Thursday 21st September – Independence Day
12. Friday 8th December – The Immaculate Conception
13. Wednesday 13th December – Republic Day
14. Monday 25th December – Christmas Day

Whenever a Public Holiday falls on a weekend this is now added to the optional vacation leave.

There are 2 such holidays during 2023 namely:

1. Sunday 1st January – New Year’s Day
2. Sunday 19th March – Feast of St Joseph

In 2023, an employee working 40 hours per week is entitled to 208 hours of paid annual leave.

This is made up of: 192 hours basic leave entitlement + 16 hours in lieu of the 2 Public Holidays that fall on weekends.

This is calculated on the basis of a 40-hour working week, and an 8-hour working day. If the average normal hours (excluding overtime) calculated over a period of 17 weeks is below or exceeds 40 hours per week, the vacation leave entitlement in hours should be adjusted accordingly, as provided for in the Organisation of Working Time Regulations.

When an employee is in employment for less than 12 months, s/he shall be entitled to a proportionate amount of annual leave.

In 2023, as it has been from the 1st of January 2019, unless otherwise agreed to in any applicable collective agreement, the employer may only utilize up to the equivalent in hours of twelve working days from the annual leave entitlement, to be calculated as provided for in the Organisation of Working Time Regulations, for the purposes of any type of shutdown, including a temporary closure of the whole or part of the premises by the employer, be it for bridge holidays or any other short periods of shutdown.

In 2023, individuals working in a non-managerial position and earning an annual base wage of not more than €20,000 will be taxed at the rate of 15% on their first €10,000 of overtime income.

The tax rate applicable to income from part-time work shall be taxed at the rate of 10% up to a maximum of €10,000 per annum. If the part-time income exceeds these amounts you will have to declare the excess in your tax return and pay tax on the difference at the normal rates.

The following table includes the calculations for Social Security Contributions for 2023 for all categories of employees. These rates have been adjusted to reflect the revised calculations as part of the pension reform.

Source: SSC Class 1 Rates – Commissioner for Revenue (CfR)

The 2023 rates for Class 2 Social Security Contributions are based on the annual net profit or income for the year preceding the contribution payment year.

Class Two Contributions are to be paid by all individuals who derive income of more than €910 from economic activity and who are not employed.

Self Employed persons are persons who receive income from rents, investments, capital gains or any other income.

NOTE 1: If the insured person elects to pay a contribution that is less than €32.78, such contribution may, if the person qualifies for a contributory benefit or a contributory pension, result in the payment of a reduced contributory benefit or contributory pension.

NOTE 2: This reduced rate is applicable for full-time farmers as identified by the Department of Agriculture.

Source: SSC Class 2 Rates – Commissioner for Revenue (CfR)

The 2023 rates for Class 2 Social Security Contributions are based on the annual net profit or income for the year preceding the contribution payment year.

Class Two Contributions are to be paid by all individuals who derive income of more than €910 from economic activity and who are not employed.

Self Occupied Persons – persons who earn income from Trade, Business, Profession, Vocation or any other economic
activity that exceeds €910 per annum.

NOTE 1: If the insured person elects to pay a contribution that is less than €32.78, such contribution may, if the person qualifies for a contributory benefit or a contributory pension, result in the payment of a reduced contributory benefit or contributory pension.

NOTE 2: This reduced rate is applicable for full-time farmers as identified by the Department of Agriculture.

Source: SSC Class 2 Rates – Commissioner for Revenue (CfR)

The daily rates of benefit payable as from 1st January 2023:-

“Pension age” means sixty-five years of age.

Provided that;

1. 1. saving the provisions of paragraph (ii) hereof, in the case of a person born on or before the 31st December 1951, pension age shall be sixty-one years;
   2. in the case of a person born during the calendar years 1952 to 1955, pension age shall be sixty-two years;
   3. in the case of a person born during the calendar years 1956 to 1958, pension age shall be sixty-three years;
   4. in the case of a person born during the calendar years 1959 to 1961, pension age shall be sixty-four years.
2. in the case of a woman born on or before the 31st December 1951, pension age shall be sixty years.