A Practical Guide for Employers

Employers in Malta must follow specific payroll procedures that ensure compliance with national employment laws, social security regulations, and taxation obligations. Below is a clear, step-by-step guide covering employer registration, payroll setup, and monthly requirements.

1. Registering as an Employer

Before hiring employees, a business must:

• Register for a PE (Permission to Employ) Number with the Office of the Commissioner for Revenue (CFR).
• Register with Jobsplus to gain access to the Employer Portal for submitting employee engagement and termination forms.
• Register for Social Security Contributions with the Department of Social Security.

🔹 2. Employee Registration

Each employee must be registered with Jobsplus using an Engagement Form (ETF) before their first day of work.

⚠️ Late registration may lead to penalties.

Additionally, ensure the employee has:

• A Social Security Number
• A Tax Number (TIN) from the CFR

🔹 3. Social Security Contributions (NI)

Employers must deduct and pay National Insurance (NI) contributions on behalf of their employees.

Contribution Breakdown (2024/2025 rates as reference):

• Employee: 10% of gross salary (capped)
• Employer: 10% of gross salary (capped)
• Government: 0.3%

NI rates are adjusted annually and based on wage brackets.

Payments are made monthly via FS5 form (see below).

🔹 4. Final Settlement System (FSS) – Tax Deductions

Malta uses the FSS system to deduct tax directly from employees’ salaries.
Steps:

• Employees complete an FS4 form at the start of employment (declaring tax status, dependents, etc.)
• Based on the FS4 and income level, the employer uses the CFR-issued tax tables to determine monthly tax deductions.
• Deductions are submitted via the FS5 form along with NI.

🔹 5. Monthly Payroll Duties

Each month, employers must:

1. Issue payslips with:
   • Gross pay
   • NI and tax deductions
   • Net pay
   • Leave balances (if applicable)
2. Submit FS5 Form to CFR:
   • Report total tax and NI deductions
   • Pay the amount due by the end of the following month

🔹 6. End-of-Year Obligations

By mid-February, employers must:

• Submit the FS7 Annual Reconciliation Statement
• Provide employees with their FS3 (Yearly Statement of Earnings & Tax Paid)

🔹 7. Important Forms Summary

Form	Purpose
FS3	Employee’s annual payslip summary
FS4	Employee tax status declaration
FS5	Monthly tax and NI reporting form
FS7	Employer’s annual payroll reconciliation
ETF	Employee engagement (Jobsplus)
Termination Form	End of employment (Jobsplus)

🔹 8. Optional Tools & Tips

Maintain clear payroll records for 5 years (legal requirement).

Use CFR’s FSS Calculator for accurate deductions.

Consider using a payroll software or third-party payroll provider for efficiency and compliance.