Malta’s Labour Model: Who Keeps the Economy Working?

The short answer: Malta is using several labour supplies at once

When an employer says a post is hard to fill, the problem may be growth, turnover, unattractive hours, pay, location or a shortage of suitable skills. Malta’s employment model currently combines high resident participation, EU mobility, third-country recruitment and continued population growth. In Q4 2025, the Labour Force Survey estimated 330,614 people in employment, 2.9% more than a year earlier, while unemployment stood at 3.4%. The Labour Force Survey is a survey estimate, not an administrative payroll count.

Demand was visible in vacancies as well as employment. NSO recorded 9,544 vacancies in Q4 2025, up 20.9% from Q4 2024. That is strong evidence of employer demand, but not of one single cause. A vacancy may reflect expansion, replacement hiring, difficult working conditions, retention problems or a mismatch between available skills and the job being offered. Central Bank analysis also finds that foreign-worker turnover has been much higher than Maltese-worker turnover, meaning some vacancies may recur rather than represent wholly new jobs.

A newer survey is already available: NSO’s 11 September release estimated employment at 339,935 in Q2 2026, 3.4% above a year earlier, with unemployment at 3.3%. The end-2025 administrative figures below remain useful for nationality and turnover analysis, but should not be mistaken for the latest total-employment snapshot.

How dependent is Malta on foreign workers?

The exact end-2025 total is now independently confirmed. Jobsplus data, as reported by the Central Bank of Malta, put employed foreign workers at 135,417 in 2025. Jobsplus’ own webpage currently renders the figure incorrectly as “13,5417”, but reports the same broad composition: about 70% third-country nationals, 30% EU nationals and 0.3% EFTA nationals. The Central Bank’s figure is an employed-person stock, not a count of permit applications or arrivals.

The categories also need care. Jobsplus’ EU-national tables include EFTA nationals who can be employed under arrangements comparable to EU mobility, while EFTA is reported separately as a share. Its third-country-national category includes legally admitted non-EU nationals as well as beneficiaries of protection and asylum-related categories. Since February 2020, UK nationals have been classified as third-country nationals for statistical purposes. These are administrative definitions, not interchangeable with everyday descriptions of “foreign workers”.

The occupational pattern is uneven. Jobsplus reports that 26% of employed third-country nationals were in elementary occupations and 24% in service and sales work. EU nationals had a broader distribution across clerical and support, professional, technical, managerial and service roles. These figures describe where people were recorded, not what they earned, how secure their jobs were or whether nationality caused a particular hiring decision.

EU mobility, permits, population and jobs are different systems

EU nationals and third-country nationals reach Malta’s labour market through different routes. EU and EFTA mobility is not organised through the same employment-based single-permit structure used for non-EU nationals. Identità states that employment-related residence permits for third-country nationals depend on the specified designation, employer and duration, while the relevant criteria continue to be met. That route is therefore more directly tied to an approved employment relationship than EU free movement.

The resident population is another denominator. NSO estimated Malta and Gozo’s population at 574,250 at the end of 2024. Net migration during 2024 was 10,614, compared with a natural increase of 193, and 76.6% of total net migrants were non-EU citizens. Population totals include people who are not working, while employed-person stocks do not describe dependants or all residents using public services.

That distinction matters for Budget 2027. Permit applications are flows. Population and employment totals are stocks. The Labour Force Survey estimate, the Jobsplus administrative measure and any Identità permit series also have different methods and denominators. A ratio between total employment and foreign-national employment should not be calculated without first reconciling those methods. For readers considering a move, the practical difference between population status, residence and employment route is worth keeping clear; the same terms do not carry the same administrative meaning.

Where are the shortages—and what do vacancies really show?

Vacancy pressure is concentrated rather than evenly spread. In Q4 2025, wholesale and retail, transport and storage, accommodation and food services, and professional, scientific, technical, administrative and support activities generated more than half of reported vacancies. The professional, scientific, technical, administrative and support grouping had the highest vacancy rate at 5.0%. Small enterprises reported a 4.6% vacancy rate, compared with 2.1% for enterprises employing 250 people or more.

NSO defines a vacancy as a paid post that is unoccupied or about to become vacant, where the employer is taking active steps to recruit and intends to fill it. That is useful evidence of labour demand, but it does not explain how long a post has been open or why it remains open. Without vacancy duration, recruitment attempts, pay, hours and turnover, the figures cannot separate a genuine skills shortage from repeated churn or jobs that employers struggle to retain people in.

The European Commission’s 2026 assessment supports a broad diagnosis of persistent labour shortages, skills mismatches and job-quality risks. It also points to weaknesses in learning and skills formation. That is an institutional assessment, not a finding that every vacancy has the same cause. Wages, working time, transport, housing, employer practices, training capacity and infrastructure can all affect whether demand turns into a sustained job.

Malta still has resident labour reserves—but not an unlimited one

Participation is high, but the remaining gaps are economically important. In Q4 2025, the employment rate for people aged 15–64 was about 80%, with a male rate of 85.9% and a female rate of 72.4%. The activity rate for the relevant Labour Force Survey population was 82.7%. The gender gap is therefore a domestic labour-supply question as well as a migration question.

NSO recorded 165,967 inactive people in the quarter, with reaching retirement age or taking early retirement the main reported reason for inactivity, at 43.7%. That is not a pool of immediately available workers: inactive people may face health, caring, financial, skills or other constraints. It does show why a labour strategy focused only on overseas recruitment would leave participation, training and later-life work underdeveloped.

Central Bank analysis finds that foreign workers accounted for around three-quarters of the rise in employment since 2013, while the number of Maltese people in work also increased substantially, particularly among women below early pension age and older workers. The appropriate conclusion is not that one source replaced the other: Malta expanded labour supply through both migration and domestic participation reforms. This is analysis of labour-supply growth, not a causal estimate of displacement.

Ageing makes the trade-off sharper. NSO reported an old-age dependency ratio of 26.6% in 2024—roughly four working-age adults for every person aged 65 or over. This is a demographic indicator, not a complete fiscal calculation, but it explains why participation, skills and migration affect both the contribution base and demand for services.

Migration policy: what was operative by 4 October 2026?

From 1 October 2025, employers generally had to advertise a vacancy on Jobsplus and EURES before applying to recruit a new or still-abroad third-country national. Identità described a three-week advertising period in the preceding two months, reduced to two weeks for specified routes including the Key Employee Initiative, Skilled Employee Initiative, EU Blue Card and Skilled Occupation List. Listed exemptions included certain health, elderly and disability-care roles, regulator-endorsed cases, sportspersons and changes of employer.

This measure was IN FORCE by 4 October 2026, but its scope matters. It applied to specified new and still-abroad applications, not to all foreign employment. Change-of-employer applications were treated differently, and the rule did not operate as a general cap on foreign workers or an equivalent restriction on EU free movement.

The pre-departure course launched on 5 January 2026, and Identità confirmed that certificate verification began on 1 March 2026. By the cutoff, the requirement was operational for applicable new and still-abroad third-country-national applications, subject to exemptions. Tourism and hospitality applicants also faced separate Skills Pass requirements where applicable. Those measures are different from policy statements about future legislative amendments or longer permits; no such future proposals are treated here as operative law.

Worker conditions, retention and the limits of the displacement argument

The European Commission reports that third-country workers in low-skilled jobs can face long working hours, higher turnover, restricted career progression, limited rights in case of job loss and weaker health and safety conditions. Its report also identifies a substantially higher in-work-poverty rate for third-country nationals than for the native-born population. The comparison should be read as a Commission finding based on the report’s underlying data, not generalised to every worker or sector. It makes enforcement and job quality part of labour-market policy.

The Central Bank’s research points to a second job-quality issue: retention. Its 2025 study found that nearly one-third of foreign workers left within their first year and about half within three years. A separate 2026 analysis found foreign-worker turnover rates around twice those of Maltese employees; by the end of 2025, the foreign-worker rate had fallen back to around 100%. Length-of-stay estimates and turnover rates are related but not identical measures. They describe churn, not automatically exploitation or failed recruitment, but they show why a vacancy can recur.

The available evidence does not establish that foreign workers have displaced Maltese workers across the economy. The Q4 2025 employment, vacancy and Jobsplus releases show rising employment, low unemployment, persistent vacancies and substantial foreign employment, but they do not contain the linked worker, wage and employment-transition data required for a causal national estimate. That conclusion should not be overstated in the opposite direction: foreign inflows have affected labour supply, participation, shortages, wage pressure and turnover. The evidence supports measurable labour-market effects, not a proven economy-wide nationality-based displacement claim.

What Budget 2027 should confront

The fiscal question is a balance of capacity, participation and quality. More people in work can enlarge the tax and social-contribution base and help firms operate. More residents also increase demand for housing, transport, health, education and other services, while ageing raises longer-term pressure. MFAC has described foreign-worker inflows as helping to alleviate labour shortages and some wage pressures, while wider evidence points to capacity and infrastructure challenges. That is a trade-off, not a quantified net fiscal balance.

A credible Budget 2027 labour agenda would measure resident participation by gender, age and education; training and adult-learning outcomes; vacancy duration and turnover; pay and working-time conditions; inspections and enforcement; permit outcomes by route; and the infrastructure consequences of population growth. It should also ask whether small employers can access training and whether Malta is building skills for the work it wants, rather than repeatedly importing labour for work that has become difficult to make sustainable. These are recommendations, not measures already adopted by government.

The immediate next step is better evidence. Policymakers should publish comparable series connecting vacancies, recruitment routes, employment, wages, job duration, inspections, skills and service capacity. The exact foreign-employment total is clarified by Central Bank reporting, but the Jobsplus page should still correct its malformed display and the authorities should publish more detail on how migration-policy controls operate by route and exemption. Until then, Malta can know that its labour model is working hard—and still not know whether it is becoming more resilient.

The measures Malta must not mix

Policy status by 4 October 2026