Payroll Contributions in Malta - 2026
We’re continuing our payroll conversation, and today the spotlight is on contributions.
Talking about payroll without mentioning social security contributions is like talking about rent without utilities. They’re not always front and centre, but they’re always there.
In Malta, these contributions aren’t optional. They’re mandatory social security payments deducted from wages and matched (or paid) by employers. They help fund pensions, unemployment and sickness benefits, maternity leave, and other forms of social support. In short, they’re what keep Malta’s social safety net running.
Contributions are set out under the Social Security Act and apply to most employees, whether full-time or part-time. Certain self-employed individuals also pay into the system, although the way they do it works a little differently — more on that later.
Employer Contributions
On the employer side, the rules in 2026 are fairly straightforward. Employers are required to pay social security contributions for each employee based on the employee’s basic weekly wage. In practice, the contribution works out to around 10% of that basic wage, up to a capped weekly amount.
Once an employee’s earnings go beyond the upper threshold, contributions stop increasing and fixed weekly amounts apply instead. For example, employees earning above the top band attract weekly contributions of roughly €49.04 each from employer and employee for older cohorts, and around €55.93 for those born after 1 January 1962. On top of this, employers also contribute to the Maternity Leave Fund, which is paid separately from standard social security.
Employers must calculate these amounts each payroll cycle, combine their own contribution with the employee’s portion, and submit the total to the Maltese authorities by the prescribed deadline. One upside for businesses is that employer contributions are fully tax-deductible as a business expense, offering at least some relief when dealing with overall payroll costs.
Employee Contributions
From the employee’s perspective, social security contributions are deducted directly from their pay. Employees contribute about 10% of their basic weekly wage, again subject to the same caps and thresholds used for employer contributions. The employer withholds this amount and pays it to the authorities together with their own share.
When it comes to what counts as “basic wage,” contributions are generally calculated on basic salary and regular fixed allowances. One-off bonuses, expense reimbursements, and certain non-recurring payments usually fall outside the scope of social security calculations, although payroll setups should always be clear on what is considered contributable income.
In return, employee contributions build eligibility for state pension, unemployment benefits, sickness and injury benefits, and other forms of social assistance. These deductions may reduce take-home pay today, but they directly support long-term social security entitlements.
Different Contribution Categories
Not every worker in Malta is treated exactly the same for social security purposes. Most employees fall under Class 1, which covers both full-time and part-time workers and applies weekly contribution rates based on earnings bands.
Employees under the age of 18 or those earning below certain thresholds pay lower fixed weekly contributions, while employees earning above the upper limits move onto capped weekly amounts instead of percentage-based calculations. The system is designed to scale contributions according to earnings while keeping them predictable at higher income levels.
Self-occupied and self-employed individuals fall under Class 2, where contributions are calculated differently and are typically linked to annual income or profits rather than weekly wages. There are also specific rules for apprentices, seasonal workers, and people outside typical working ages, but the underlying principle remains the same: contribution obligations depend on the type of work performed and how much is earned.
Wrapping Up
Payroll contributions in Malta aren’t just a legal requirement — they’re a core part of how the country’s social system functions. For employers, they represent a predictable and deductible payroll cost. For employees, they provide access to benefits today and financial security in the future.
Whether you’re setting up payroll for the first time or reviewing an existing system, understanding how contributions work on both sides is essential for staying compliant and avoiding costly mistakes. Next time, we’ll turn our attention to employee income tax in Malta and look at how tax and contributions fit together to form the full payroll picture.
