Social Security Contributions

Updated: June 26, 2020 | 15 minute read

Interested in our services? Our team is here to help.

Contact us

All persons who are over the age of sixteen (16) and who have not yet attained retirement age of 65 years, and who are in insurable employment, are liable to pay Social Security Contributions.

Social Security contributions are paid in weekly rates, and each year of gainful occupation will carry 52 or 53 social security contributions (depending on the annual number of Mondays) on the payee’s contribution record. 

Social security contributions are divided into 2 different classes:

  • Class 1: relevant for employed persons, and

  • Class 2: relevant for self-employed persons.

a) Class 1 – Employed Persons

Class One Rates apply for every person who is employed in insurable employment.
 
Every employment specified in Part I of the First Schedule to the Social Security Act unless exempt under Part II of the Schedule, is deemed to be insurable employment.
 
A person who is employed in more than one insurable employment is deemed to be employed in that insurable employment which carries the higher or highest basic wage or salary.
 
All full-time or part-time employees who are employed for less than eight (8) hours in any one calendar week are not considered as being in insurable employment for Social Security Contribution purposes.
 
Social Security Contributions by Employed persons are paid by direct deductions from the same employees’ wages/salary.
 
Persons who are liable to social security contributions under Class 1:
 
  Category Description 
  Category                                                                   Description
  A    Persons under 18 years of age earning not more than the amount indicated below.
B  Persons aged 18 and over, earning not more than the amount indicated below.
C  All persons whose basic weekly wage is between the amounts indicated below.
D  All persons whose basic weekly wage is equal to or exceeds the amount indicated below.
E  Students* under 18 years of age.
F  Students* 18 years old and over.
 

*Students who are following a full-time course of studies or instruction under the Student-Worker Scheme, or other similar schemes (including the Extended Skills Training Schemes, but excluding the Worker-Student Schemes) involving distinct work and study periods for which they are receiving remuneration.

 

Class 1 Social Security Rates applicable for 2020:

                                  Basic Weekly Wage 1 €                                                Weekly Rate Payable 2  
 Category From To by Employee by Employer Total Maternity
 A 0.10 175.84 6.62 6.62 13.24 0.20
B 0.10 175.84  17.58*  17.58 35.16 0.53
*Or if the employee chooses, 10% of the basic weekly wage. This rate of contribution entitles the contributor to pro-rata contributory benefits.
 
      Persons born up to 31st December 1961
C  175.85 356.96 10% 10% n/a 0.3%
D 356.97 n/a 35.70  35.70 71.40 1.07
 
     Persons born from 1st January 1962 onward
C  175.85 465.27 10% 10% n/a 0.3%
D 465.28 n/a 46.53 46.53 93.06 1.40
 
E n/a n/a 10% Max.4.38 10% Max.4.38 n/a 0.3% Max.0.13
F n/a n/a 10% Max.7.94 10% Max.7.94 n/a 0.3% Max.0.24

1 Basic Weekly Wage or the weekly equivalent of the basic monthly salary
2 For percentage rates, the weekly rate payable is calculated to the nearest cent

 

b) Class 2 – Self - Employed Persons

Class Two Contributions are to be paid by all individuals who derive income of more than €910 from economic activity and who are not employed.
 
The Social Security Act defines two categories of persons that are required to pay Class 2 Contributions as follows:
 
  • Self Occupied Persons - persons who earn income from Trade, Business, Profession, Vocation or any other economic activity that exceeds €910 per annum.
  • Self Employed Persons - persons who receive income from rents, investments, capital gains or any other income.
 
Rates for Class Two Social Security Contributions are based on the annual net profit or income for the year preceding the contribution payment year.
 
                   Annual Net Income €                                                                                                                                         Applies To
   Category From To Weekly Rate Full Time Farmers(2) Self Employed Self Occupied
    SP* 1,006 9,024 26.03 n/a tick.png cross.png
*The SP rate applies only to single persons who are not self occupied.
 
   SA 910 10,485 30.25(1)  20.16 tick.png tick.png
1 €30.25 or 15% of the annual net earnings if the person is a part-time self-occupied woman or a full-time student who has not reached the age of 24 who is a part-time self-occupied person or a pensioner who is a part-time self-occupied person whose annual whose annual net earnings do not exceed €10,485 (see NOTE 1 at the bottom of the page).
 
  Persons born up to 31st December 1961
   SB 10,486 18,562 15% 10% tick.png tick.png
   SC 18,563 n/a 53.54 35.70 tick.png tick.png
 
  Persons born from 1st January 1962 onward
   SB 10,486 24,194 15% 10% tick.png tick.png
   SC 24,195 n/a 69.79 46.53 tick.png tick.png
 

NOTE 1: If the insured person elects to pay a contribution that is less than €30.25, such contribution may, if the person qualifies for a contributory benefit or a contributory pension, result in the payment of a reduced contributory benefit or contributory pension.
2: This reduced rate is applicable for full-time farmers as identified by the Department of Agriculture.

 

 

We're here to help

Our team will help you deliver results whilst working to the highest professional standards. Nexia BT your reliable partner in Malta.

Get in touch