Payroll Services in Malta

Payroll Services in Malta

Christabelle Agius

Christabelle Agius

Team Leader – Accounting Services

The outsourcing of companies’ payroll frees up resources and valuable human capital for our clients. Our confidential and customised payroll caters for all the formalities involved in fulfilling all your business’ payroll needs.

Contact our experienced and specialised team for assistance.

 

Outsourcing of Payroll

Companies which are engaged in employment activities in Malta, are required to keep full records for each employee, to include amounts paid as salaries, bonuses, allowances, any other additions, together with any deductions required by law relating to income tax and social security contributions (NI) from the date of engagement to the date of termination of employment. It is very important that statutory requirements are strictly adhered to.

CSB Group’s dedicated payroll team assists clients with their payroll requirements where the outsourcing of payroll is required. CSB Group currently provides accounting and payroll services to well over 500 companies which operate within the online gaming, financial services, retail, aviation, marketing and consultancy services. Currently the largest payroll being administered consists of 200 employees. CSB Group’s Payroll Services are further complemented by Tax and Employment Law.

CSB Group have been our service providers for the last few years and have assisted us in a range of services including accounting, payroll, legal and corporate services. In our experience, CSB has proved to be of great use.

Play’n Go

Payroll Function Setup

Our team can handle the setting up of the payroll function and the registering of the employees that will be working in  Malta. This includes the obtaining the PE Number (Employment Number) in Malta; a number which is mandatory to obtain before a company can engage any employees. We further assist employees with obtaining their Maltese social security number, ID Card/ E-residence number/ Expatriate Number and to become engaged with the Inland Revenue Department through the submission of the FS4 and become engaged with Jobplus. This would include the submission of FS4s and Jobplus (previously ETC) engagement forms to the relevant authorities. The setup also includes the setting up of the payroll software and inputting of employees’ details.

Employment Contracts

Our legal team can assist in the drafting and preparation of the respective employment agreements/contracts (be they definite or indefinite). Working together, our payroll and legal teams can assist clients in terms of specific employment regulations relating to probation, notice periods, leave entitlements (including wage regulation orders) (for all types of leave including vacation leave, sick leave,  maternity leave, etc), among others.

Payroll Generation

CSB Group handles clients’ monthly payroll generation of payslips and FS5s. Such payslips show the basic salaries, overtime, allowances and bonuses (including government bonuses), tax and NI deductions of the respective employees. The FS5s show the gross salaries for that month, income tax and social security deductions that will be submitted to the Inland Revenue Department.

CSB Group has assisted us in the initial set up of our Malta subsidiary (Iperceramica Malta Ltd) as well as it has given us ongoing support during the course of normal business in legal, accounting and HR areas. We are very happy with the advisory work CSB has conducted, we consider it a trusted and capable partner and we can definitely recommend its services.

Iperceramica

Transfer of Funds & Salary Payments

We can also assist with directly effecting payment towards the respective employees. Funds are usually transferred by the respective company to a segregated client’s account held by CSB so that direct credits are processed accordingly. Funds are also transferred for the amount of the income tax and social security contributions which need to be paid to the tax department accompanied by the submission of the FS5.

If there are a significant number of employees to be paid, the banks in Malta also offer payroll solutions whereby Maltese bank accounts are opened for even the foreign employees within a short timeframe. The employees are provided with personal accounts that offer,

  • Free e-money account to fit around their lifestyle with free and easy to use online banking
  • A Debit Card linked to their e-money account to spend their money at retail or online stores or just withdraw cash at any ATM
  • Functionality for set up of enhanced secure card settings available free of charge
  • Money transfers at great rates to any bank account in the world
  • Mobile application to manage their money from the palm of their hand

At CSB, we can coordinate this for you so that both the company and the employees can save on charges and be offered a very convenient and flexible way of payment.

Annual Leave Records

We can also keep the leave records (including vacation and sick leave) of the individual employees, and these will be recorded on the employees’ payslips so that the employees and the company are aware of the leave taken and leave balance remaining.

Inland Revenue Form Submission

On an annual basis, the FS7 and FS3s are prepared and submitted to the Inland Revenue Department in Malta. The FS7 shows the annual gross salaries of all the employees and their annual amount of income tax deductions and social security contributions. The FS7 is the annual document for the company’s total amount of salaries, tax and NI. The FS3 on the other hand also shows the annual gross salaries and annual deductions of income tax and NI contributions, but pertaining to each individual employee. Therefore whereas there will be one FS7 on an annual basis, there will be an FS3 for each employee on an annual basis. The original of the FS3s will also be sent to the respective employees’ addresses because these will then be required for the compilation of their personal income tax returns. At CSB Group, we can also assist with the completion of the personal  income tax returns for the respective employees which are due by 30th June of the following year.

Termination of Employment

If an employee resigns, or is terminated, we also handle the termination process including the payment of his last salary (including any pro-rate leave entitlements and government bonuses), the submission of the termination forms at Jobplus, etc. Our legal team can also assist clients with the legal implications of redundancy, dismissal and termination and the consequent rights and obligations of the respective parties involved to ensure a smooth process is maintained.

Income Tax Deductions

Deductions relating to income tax are made from the gross salary on a monthly basis, using a system known as the Final Settlement System (FSS), whereby the portion of tax due on the income for that particular period is withheld by the employer from the employee’s salary. The tax is computed according to the single, married or parental rates depending on which applies to the particular employee. Part-time rates may also apply if the employee is fully employed elsewhere, however these rates cannot be applied if the employee is a director.

Social Security Contribution Deductions

Deductions relating to Social Security Contributions (“SSC”) are made on a monthly basis. The amount of deduction would vary depending on the category under which an employee is classified. The category is determined by reference to the employee’s age and by reference to his weekly basic wage/salary. However the amount of SSC is capped and thus, even if the salary increases, the maximum amount of SSC will be a certain amount per week; calculated depending on the number of Mondays in that particular month. In most cases, the same amount of SSC paid by the employee needs to be paid by the employer.

As outlined above, on a monthly basis the employer will need to submit to the Commissioner of Inland Revenue, a return (the FS5) summarising both the amount of income tax and SSC deducted from the employees’ salaries as well as the amount of SSC paid by the employer. This will need to be accompanied by the relative payment for these deductions. Yearly reports reconciling all of these amounts also need to be submitted to the Commissioner of Inland Revenue. These are the FS7s and FS3s referred to above.

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CSB Group
[email protected]

+356 2557 2557