Employment in the Maldives is governed by the Employment Act (Law No. 2/2008), which applies to both Maldivian and expatriate employees and is enforced by the Labour Relations Authority. Here is what employers need to know about leave, pay, tax, pension and ending employment.
The Employment Act sets the minimum leave every employer must give. Employment agreements can be more generous, but any agreement to give up statutory annual leave is void.
Paid leave after completing one year of employment. The employer sets the dates after consulting the employee, and unused leave must be paid out when employment ends.
Paid sick leave each year, normally against a medical certificate. Up to 15 of these days can be taken without a certificate, for absences of no more than 2 consecutive days.
Paid by the employer on normal paydays. Up to 30 days can be taken before the expected delivery date.
Paid leave each year to attend to important family obligations, such as caring for a sick family member.
Leave figures follow the Employment Act as consolidated by the Labour Relations Authority, which includes amendments up to Law No. 15/2022.
Set up each Maldivian leave type in IceHrm with its own accrual, carry forward and approval rules, including pro-rata entitlements for new joiners. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The Maldives introduced a national minimum wage on 1 January 2022, set by order of the Minister of Economic Development on the advice of a Minimum Wage Advisory Board. The rates differ by business classification, and the Act requires the Board to review them every 2 years, so check the current order before setting pay.
Excluding overtime. Employees must get at least 24 consecutive hours off after 6 consecutive working days.
Of the hourly salary. Overtime is only required where the employment agreement provides for it.
Employees working normal hours on a public holiday also get at least half a normal day’s wage on top.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so normal day, Friday and public holiday overtime reflect what was actually worked. Time & attendance →
Personal income tax was introduced by the Income Tax Act (Law No. 25/2019), and employment income has been taxable since 1 April 2020. Residents are taxed on their worldwide income; non-residents only on income from the Maldives. The tax year is the calendar year.
| Annual taxable income | Rate |
|---|---|
| Up to MVR 720,000 | 0% |
| MVR 720,001 – MVR 1,200,000 | 5.5% |
| MVR 1,200,001 – MVR 1,800,000 | 8% |
| MVR 1,800,001 – MVR 2,400,000 | 12% |
| Over MVR 2,400,000 | 15% |
Employers withhold tax from salaries each month using monthly brackets that mirror the annual table: nil up to MVR 60,000 a month, then 5.5%, 8% and 12% up to MVR 200,000, and 15% above that. Employers register employees whose pay is subject to withholding with MIRA and file a monthly EWT return. An employee whose only income for the year is from one employer generally does not need to file their own tax return.
The main statutory payroll cost is the Maldives Retirement Pension Scheme (MRPS), run by the Maldives Pension Administration Office under the Pension Act.
Of the employee’s basic salary (the pensionable wage), paid monthly. Employers may contribute more.
Deducted from basic salary by the employer, giving a total of 14% paid into the employee’s retirement savings account.
Including temporary employees and those on probation. Participation is optional for foreign employees.
Expatriates need a work permit, issued within the quotas set by the ministry responsible for employment. The Employment Act sets a work permit fee of MVR 350, and other employment-related fees for foreign workers are set by regulation.
Build Maldivian pay the way you already structure it, with your own salary components, deductions and formula columns, such as MRPS pension contribution columns. Want to know how well IceHrm handles payroll calculations for the Maldives? Contact us or see Payroll →
Employment is not "at will". An employee can only be dismissed for reasonable cause, and the employer must prove it. Pregnancy, illness, union membership, making a complaint or discrimination on protected grounds can never be a reason for dismissal.
| Length of service | Notice |
|---|---|
| More than 6 months, less than 1 year | 2 weeks |
| 1 year, less than 5 years | 1 month |
| More than 5 years | 2 months |
A position may be made redundant when a business or service closes, operations change or the employer’s finances decline, following the procedure set by regulation. Longer notice, or pay in lieu, applies:
| Length of service | Notice or pay in lieu |
|---|---|
| Less than 1 year | 1 month |
| 1 to 4 years | 2 months |
| More than 4 years | 3 months |
The Employment Act does not set a general severance payment. Employees who believe they were dismissed without reasonable cause can complain to the Employment Tribunal within 3 months, which can order reinstatement or compensation. Unused annual leave must be paid out on termination.
Friday is the weekly day of rest and counts as a public holiday under the Employment Act. Most national holidays follow the Islamic calendar, so their dates move about 11 days earlier each year and are confirmed by the government.
Employees who work normal hours on a public holiday are paid at least half a normal day’s wage in addition to overtime. The government may also declare extra holidays in a given year.
Leave groups give each office its own holiday calendar, so you can update the Islamic holiday dates each year and have staff in Malé and at resort or island sites get the right days off. Holiday calendars →
Every employee must have a written employment agreement, with a signed copy given to the employee. Employers who fail to do so face a fine of MVR 2,000 to MVR 20,000 depending on the size of the business.
A written job description, setting out the duties and scope of the role, must be given within one month of the start date and updated after a change of job or promotion.
Probation can last no more than 3 months. Either side can end the agreement during probation without notice, but probationers keep their statutory rights, including the minimum wage. Fixed-term agreements cannot exceed 2 years; a fixed-term agreement renewed or extended beyond 2 years in total becomes an indefinite one. Agreements for roles that are normally permanent are also treated as indefinite.
Send employment agreements and job descriptions for e-signing, store them with work permit documents on the employee’s record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Maldives, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Maldives? Talk to us.
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