The social security contribution is also referred to as ‘bolla’ in Maltese. ‘Bolla’ refers to the ‘stamp’ that used to be manually affixed to a person’s notebook showing the number of contributions a person paid. A social security contribution is also referred to as SSC or NI, in abbreviated terms.
The amount of contribution that is paid depends on your gross wage or salary (in case you are an employee) or profits (in case of a self-employed), deducted as a pay-as-you-earn arrangement prior to you receiving your wage or salary in case of employees. For self-employed persons, contributions are paid at the Inland Revenue Department – Floriana – in April, August and December and contributions paid are based on the profits of the previous year.
Paying social security contributions is crucial as missing contributions have a negative affect on your
- contribution average
based on the number of social security contributions that you have built up
- pension entitlement
Apart from the fact that pension rate is subject to the contribution average result, best years chosen have to have a full year of social security contributions paid (52)
- other contributory benefits
such as invalidity pension
- possibility to retire at 61 if desired
To retire at 61, certain conditions apply (for example: persons born during 1959 & 1961, need to accumulate 35 years of social security contributions, meaning 1820 contributions to apply at 61)
- opportunity to benefit from the full percentage increase measure
This measure is a top-up pegged to the postponement of pension beyond the age of 61 and is linked to having had enough contributions to claim a pension at 61 but refused option, delayed pension and chose to work past age 61 for another year, two, three, four years.
For employees the contribution that you pay falls under what is known as a Class I contribution. Click here for class I social security contribution rates.
Social Security Contributions are deducted by the employer. The employer also pays its share, depending upon year of birth of employee and basic weekly wage.
A two-week gap, let’s say between on job and another, renders the whole year incomplete (50 social security contributions instead of 52). Such a small gap shall not leave a negative affect on pension rate. However, we always suggest that you request a tentative assessment.
ĠEMMA also suggests that you keep an eye on your own record – check that social security contributions and tax are being deducted and paid by the employer to the Inland Revenue Department. If in doubt, ask.
For self-employed persons the contribution you pay falls under what is known as a Class II contribution. You can find out more about class 2 social security contributions here.
Social security contribution rates are based on the annual net profit or income for the year preceding the contribution payment year. For example rates year 2020 are based on profits earned during the year 2019.
Social security contributions are paid by the individual or by the accountant on behalf of the individual in April, August and December of each year. National Insurance Contributions may be settled late but could incur penalties and interest on late payments.
|Year of birth||Accumulation|
|Between 1959 and 1961||35 years|
|Between 1962 and 1968||40 years|
|Born during and after 1969||41 years|
For persons under 18 years of age (category A) and for persons aged 18 and over (category B), earning not more than Euro 181.08 for year 2021, need to pay the weekly payable rate of Euro 18.11. When choosing to pay a contribution that is less than the amount indicated above, that is 10% of the basic weekly wage you would be paying a fraction of the 52 contributions a year. Such a contribution as well as gaps in contribution history sheet (missing Social Security Contributions) may result in the payment of a reduced contributory benefit or contributory pension when you qualify for a contributory benefit or a contributory pension.
If you do not have a full contributory period there are schemes in place that allow you to pay for missing contributions – and thus allow you to increase your pension income. If you want to know more about these schemes please click here.
The pension system compensates you by what are called ‘credits’ for certain life events during which you were not in paid employment – these include child rearing, studying, vocational work, etc. If you want to know more about the different types of credits and how these work please click here.
– Never hesitate to ask for a tentative assessment which gives you a state pension forecast making it possible for you to reflect and sort things out. A pension prediction entitlement is always based on your current contribution history and for those in employment, assumes that contributions are made up to retirement date. In case of missing contributions, you may query your difference in pension rate if unpaid past contributions are settled.
– Furthermore, you may request a social security contribution record sheet at any time, which illustrates each year of your working life and tells you how many national insurance contributions were paid. Deficient years can be turned into complete years at the age of 59, as explained above.
– If missing contributions are noted whilst in employment, it does not necessarily imply that the employer have failed to pay them on your behalf. The Department of Social Security can help by sending a letter which you would need to present at IRD requesting FS3s as guided by the Department.