Your guide to payroll management in Malta

7 months ago   •   .6 min read

.By İlayda Birol
.Table of contents

Continuing with our business advice for entrepreneurs and small business owners based in Malta or running companies from Malta, this article will give you all the information you need on payroll management in Malta. Payroll management includes careful calculation and distribution of employee salaries or wages; making sure you’re following tax and social security regulations; and managing deductions and benefits owed to employees. To keep your employees happy and motivated, it’s important to process your payroll accurately and on time. This is of course also important for keeping in line with Maltese laws and regulations.

We want you to feel empowered as a business owner and have put together this guide to take you through all the ins and outs of payroll management in Malta. You'll gain a thorough understanding of the components that make up payroll, the payroll processing procedures, and essential tips for effective payroll management. We'll also introduce you to an exciting opportunity for Maltese businesses – the wamo cashback campaign. This allows you to earn rewards while managing your payroll and other financial obligations.

What is payroll?

The basic definition of payroll refers to managing and processing employee compensation. This would include things like salaries, wages, bonuses, benefits and deductions. It includes all transactions related to anything employees earn and the contributions owed on their behalf. This makes it all sound quite straightforward, but the more employees you have the more complex the process can be. This is why it’s a good idea to have a solid set up from the get go.

The importance of payroll management

Now that we know the basics of what payroll management is, we need to understand why it is so important. There are a few reasons, let’s take a look:

Legal compliance: There are strict labour and taxation laws in Malta. This means businesses need to accurately calculate and report all employee compensation. If your company fails to do this it can result in legal penalties.

Employee satisfaction: Being paid consistently and on time will boost morale of employees and increase job satisfaction.

Financial transparency: If you’re transparent with your payroll practices, employees, stakeholders and regulatory authorities will recognise your financial integrity.

Taxation: Proper payroll management will make sure you’re paying the correct income tax and social security contributions.

Record-keeping: To assist with budgets, tax reports and financial planning you will need good payroll records. This is a useful resource for both employees and businesses.

Understanding the tax system in Malta
Get a clear picture of Malta’s tax system, including company tax rates. Your go-to resource for taxation knowledge.

Components of payroll in Malta

There are different components to payroll in Malta. You will need to pay meticulous attention to detail with all of them. In this section we’ll look at salary and wages; employee benefits; deductions; and bonuses and incentives.

Salary and wages

Employee salaries: The main part of payroll is the salary or hourly wages paid to an employee for their work. The salary or wages of an employee will differ depending on things like experience, qualifications and necessary job responsibilities.

Overtime pay: If employees work more than their regular hours, they’re entitled to overtime pay. This is generally calculated at a higher rate per hour.

Minimum wage: Malta has a minimum wage rate that employers need to adhere to. This is to make sure that all employees get compensated fairly. As of 2023, the minimum wage is € 835 per month. Keep up to date with the adjusted minimum wage rates as necessary.

Employee benefits

Health insurance: A lot of employers in Malta provide health insurance coverage to their employees. This contributes to their overall well-being and healthcare expenses.

Pension schemes: It’s common for employers to offer pension schemes or retirement plans to help employees save for their future financial security.

Paid leave: This would include paid time off, including for things like vacation days, sick leave, maternity/paternity leave, and public holidays.

Bonuses and incentives: Sometimes businesses offer performance-based bonuses and incentives to motivate employees and reward exceptional work.


Taxes: When you work, you’re subject to paying taxes. Employers are responsible for deducting the appropriate amount from each employee's salary and paying it to the government.

Social Security Contributions (SSC): In Malta, both employees and employers make SSC payments. This goes towards funding social security benefits, including retirement, healthcare, and unemployment benefits.

Other deductions: These may include contributions to employee pension schemes and union dues.

Bonuses and incentives

Performance bonuses: Some employers may offer bonuses to employees who meet or exceed performance targets or milestones.

Profit-sharing: Some businesses share a portion of their profits with employees as an incentive for company-wide success.

Introducing wamo’s cashback campaign for Maltese businesses
Don’t miss wamo’s cashback campaign, a game-changer for Maltese businesses.

How to pay payroll in Malta

Now that we know all about the components that make up payroll in Malta, let’s look at the options of how to pay payroll. Below we offer a few examples:

Bank transfers: For timely and secure payments, employees can do bank transfers straight from their business accounts to employees’ bank accounts.

🌟 Direct debit: To automate payroll payments so that employees get their salaries on time, employees can set up direct debit transactions.

Payroll software integration: It’s worth exploring what payroll software is available as it often integrates with banking systems and facilitates seamless payment processing.

If you want to operate your business in Malta it’s important that your payroll processing is accurate. This will help with tax compliance, SSC regulations, and maintaining satisfied employees.

🌟 wamo's 1% cashback campaign: Empowering Maltese businesses

In the pursuit of success, every partnership matters. wamo, as a homegrown Maltese company, is here to open new doors of opportunity for your business. Our exclusive 1% cashback offer for all government payments to the Maltese government is designed to not only help you fulfil your tax obligations but also reward your business for its commitment. The best part? There's no maximum limit – the more government payments you make with your wamo debit card, the more you earn. Imagine earning money from every tax, fee, or contribution you pay to the government. Well, that's precisely what wamo’s cashback campaign is all about!

wamo's cashback campaign allows your business to earn a generous 1% cashback on a broad spectrum of tax payments, including income tax, VAT, Social Security Contributions, corporate taxes, and more. This offer extends to all payments made to the government, encompassing fines, contributions, and various fees.

Participating in this rewarding campaign is simple. Just follow our easy guidelines:

  • Register your business account with wamo.
  • Complete the onboarding process.
  • Create your Visa debit card within the app.
  • Follow our straightforward payment guidelines here.

As you make payments using the wamo business debit card, you automatically become eligible to earn your cashback. On the last day of the following month, we'll credit this amount to your business account.

This enticing 1% cashback offer is available to all registered businesses in Malta and is valid for one year, starting on September 1, 2023. To ensure your eligibility and access the terms and conditions, please visit this page. Alternatively, don't hesitate to reach out to our teams we’re always happy to help with your onboarding.

At wamo, we're committed to empowering Maltese businesses and making your financial transactions not just efficient, but rewarding too. Join us in this exciting cashback campaign, and let's fuel your business's path to success together.

This guide has shown the complexities of payroll management in Malta, emphasising the importance of precision, compliance, and efficiency when running your business. We've explored payroll components, processing procedures, and introduced the wamo cashback campaign, offering Maltese businesses an innovative way to simplify financial processes while earning rewards for tax and government payments.

Good (efficient and accurate!) payroll management is more than just making sure you follow legal requirements. It also contributes to employee satisfaction and the overall prosperity of your business. If you use the best practices offered in this article, along with wamo’s benefits, your business will have an enhanced payroll experience.

In your pursuit of financial efficiency in Malta, remember the value of knowledge and innovation. The wamo blog will keep you informed about evolving regulations as well as how to leverage available resources and embrace tools that support your business's growth.

wamo remains committed to helping Maltese businesses on their financial journey, and we look forward to being your partner in achieving success.


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