Obtain an Employer Number in Malta
Opening a company in Malta can be straightforward for foreign investors who meet all requirements under the Commercial Code and benefit from assistance with drafting the documentation required for incorporation. Once the trade name is approved and the memorandum and articles of association are filed with the Companies Register, the company is almost ready to start operating. However, before that, one must also check if any special licenses are required. The final steps involve registering for tax and VAT with the Inland Revenue Department. Also, if intending to hire personnel,l a Maltese company must register as an employer and obtain a PE number.
Our Maltese lawyers can offer detailed information on how to register a business for employment purposes. You can also rely on us for guidance in obtaining a Maltese employer number.
Legislation on employment in Malta
Under Maltese employment law, employers and employees have rights and obligations. The labour relations between the two parties must be established through an employment contract. Additionally, certain tax obligations arise from these relations. The employer must register with the tax authorities to pay social security contributions. The employees must also be registered for the same purpose.
The Social Security Law is the primary legislation governing Maltese companies and self-employed persons who need to obtain employer numbers or self-employed numbers, respectively.
The law provides that any employment contract, whether signed for a determined or undetermined period of time, is subject to this law. This law also regulates apprenticeship or service contracts, and the income earned from them is subject to social contributions.;
- There are three categories of employment insurance: those of employed persons, self-employed persons, and self-occupied persons.
- all individuals residing in Malta who are at least 16 years of age and a maximum of 65 years of age are subject to social contributions if they fall under one of the 3 categories above;
- there are two classes of social contributions, the class 1 which refers to employees, and class 2 which refers to self-occupied and self-employed persons.
Our attorneys in Malta can provide detailed information on the National Social Security System and the requirements for obtaining employer numbers in Malta.
What is the Maltese PE number?
Maltese employers must obtain a PE number to retain and pay the national insurance taxes for their employees. These payments are established under the final settlement tax reporting procedures. The final settlement tax (FSS) is also used to deduct the taxes paid by an employer at the end of the fiscal year.
Contributions withheld by Maltese companies for insurance purposes are governed by the Social Security Act of 1987. These contributions have been classified as Class One and Class Two. The Maltese employer number is a 6-digit reference.
Our lawyers in Malta can provide you with information on the Social Security Act and the national insurance contributions employers withhold.
How to obtain an employer number in Malta
It is straightforward to obtain an employer number in Malta; however, different application forms must be submitted to the Internal Revenue Department (IRD) depending on the employer type.
Maltese companies must register for tax purposes during the business registration process, and the employer number will be issued by the tax authorities through Jobplus or Business First, depending on the structure chosen.
Maltese companies and sole traders can file their applications online, in person (through a representative for companies), or via the national postal services. The tax identification number, also known as the employer number, is IDAYS. For a few days, for foreign citizens. For sole traders, the Expatriates Registration Form must be filed with the Revenue Commissioners for purposes based on the Revenue residence permits.
Our law firm in Malta specialises in business registration matters, and those interested in setting up companies here can benefit from our full-service, which includes obtaining employer numbers.
Applying for an employer number in Malta
Maltese companies can file for an employer number online or directly at the Inland Revenue Department. The documents to be submitted are:
- - the tax identification number;
- - the VAT number;
- - a prescribed application form.
The company must also provide information on the number of employees, the date of their employment, and details about the business. It takes about three working days for the Inland Revenue Department to process the PE number application.
Once the employer number has been issued, the company must register its employees with the Employment Training Corporation.
Social security contribution classes in Malta
One of the most important aspects of employment in Malta is paying social security contributions to the tax authorities. Those who have obtained Maltese employer numbers automatically comply with the applicable legislation, which requires holding the necessary contributions and paying them to the IRD.
There are two social security contribution classes applicable in Malta. The Class 1 contribution applies to employed persons who hold a full-time position in a Maltese company. The Class 2 contribution addresses self-employed and self-occupied individuals.
The following regulations apply to Malteseemployeer number holders:
- - a rate of 10% is imposed on Class 1 contributors to the monthly income of employees (the income must be at least the minimum wage imposed by the law);
- - self-employed persons must earn at least 910 euros per year to pay social contributions;
- - in the case of self-employed persons, the social contributions will only be paid for pension purposes;
- - The rate for Class 2 contributors is 15%; however, different requirements apply to self-employed and self-occupied persons.
- - The contribution must be paid every month in the case of employees and every 4 months in the case of the other two categories of payers.
Foreign nationals who have moved to Malta for employment must also register for social contributions. Only self-employed and self-occupied persons must obtain employer numbers in Malta.
For Maltese citizens or residents working abroad, social contributions must be paid in accordance with Class 1 contributions; however, the employer is exempt from paying these contributions.
If you need assistance in registering a business or applying for an employer number, do not hesitate to contact our law firm in Malta.
