What is FSS (Final Settlement System)?
The Final Settlement System is how Maltese employers report and pay payroll tax and social security. Employers hold a PE number and file FS5 monthly, then FS7 and FS3 by 15 February.
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Current Rate (Calendar year)
FS5 by the last working day of the following month. FS7 and FS3 by 15 February
Example
Payroll for March is remitted on an FS5 by the last working day of April. The annual FS7 reconciliation and FS3 statements follow by 15 February.
How FSS (Final Settlement System) works in Malta
Every employer needs a Permission to Employ (PE) number from MTCA before running payroll. The FS5 carries withheld tax and social security. The FS7 is the annual employer reconciliation, and the FS3 is the statement given to each employee.
The FSS rules are S.L. 372.14. Company cars given to employees are taxable fringe benefits valued under S.L. 123.55.
Finn tracks the monthly and annual dates and reminds you about the PE number before a first hire.
Related terms
Class 1 social security for employees is 10% from the employee and 10% from the employer of basic weekly wage, capped at €55.93 a week each for people born from 1962 in 2026. Employers also pay a 0.3% Maternity Fund contribution.
Maltese VAT has an 18% standard rate, reduced rates of 12%, 7% and 5%, and a 0% rate described as exempt with credit, which covers food for human consumption and pharmaceuticals.
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