It is fundamental for both employers operating in Malta, and employees working remotely from Malta, to ensure that they are complying with social security regulations, both Maltese and non-Maltese.
This mainly entails ensuring that these individuals are properly registered for social security contributions with the respective Social Security authorities and that the appropriate contributions are being deducted. This should, among other things, ensure that such employees may tap into the benefits and protections provided by the Maltese or non-Maltese social security system including healthcare, pensions, and unemployment benefits.
Remote working is defined under European principles as an activity carried out in another location or country, whereby the employee (who can perform the said activity from the employer’s premises) makes use of information technology to carry out the necessary activities in another location or country, whilst remaining connected to the employer’s working environment.
The determination of which country's social security laws apply to remote workers can be complex and may depend on various factors, such as the duration and nature of the remote work arrangement, whether the employee is an EU national or not, as well as any applicable bilateral social security agreements between Malta and the worker's country of residence.
Furthermore, following 1 July 2023, Malta officially joined the EU Framework Agreement on Cross-Border Telework. In brief, this agreement stipulates that if an employee works remotely for at least 50% of their working hours in their country of residence, then such employee should be subject to the social security scheme of their country of residence.
If the employee works less than 50% of their working hours in a member state of the said agreement, for a company located in another member state, they can still retain the social security system of the employer's member state.
One can also have situations which are even more complex than others, for example, remote workers who are moving from one country to another at short intervals.
Given the above complexities, our message is that one should tread carefully in this space to avoid unpleasant surprises both for the employee and also the employer, whilst at the same time allowing this new phenomenon to continue to evolve for the benefit of everyone.
How can we help?
Our experienced social security team at PwC Malta can help you with these intricate matters of social security resulting from remote working.
Contact us
