Since Malta joined the European Union in 2004, the average hourly labour costs have gone up by €2.70. At the time they joined Malta was on 11th place with average labour costs of €9.60, and Bulgaria had the lowest average of just €1.60. After Malta joined the eurozone in 2008, labour costs went from €11.40 up to €12.30. Now, in 2014 Malta is still on the 11th place in the EU with €11.80, and Bulgaria still has the lowest labour cost with €3.80. The EU average had increased by €4.80.
The labour costs in Malta for the business sector are still less than half of the EU average, and they are currently averaged at €11.80 compared to the EU average of €24.50. The services sector is 50% of the EU average and the construction sector 44%.
Malta does not only have low average labour costs, it also has the lowest share of non-wage related costs, such as social contributions. The EU average is currently at 24.4% (23.1% in the euro zone) and Malta has the lowest rate of 6.9%.
These figures can give entrepreneurs and companies a rough idea of what to expect when setting up a business in Malta. Of course, depending on what type of business you have, and what type of professionals you will need to employ, the cost for wages can vary significantly. The low social security contributions also contribute to the great reputation that Malta has with companies.
These figures are also very interesting for people taking up work on the islands. The low labour costs may indicate a low salary, which might be true if you compare it with other countries, but you will also need to consider income tax and social security deductions, as well as cost of living. Malta offers a very attractive income tax structure, with rates starting from 15%, and going up to 25% if you earn less than €60,000 a year. As mentioned above, Malta also has the lowest cost for social security. Furthermore, the cost of living is very reasonable considering many things need to be imported.
If you are interested in the company formation in Malta or moving your business over to the islands, you are welcome to contact us at the office of Dr. Werner & Partner for a personal consultation.
