Employing yacht crew: contracts, payroll and social security
Crew contracts, payroll and social security are Maritime Labour Convention obligations, not extras, and the flag can decide whose social security applies.
Crew employment and payroll covers the contracts, pay and social security of the seafarers a yacht employs. The Maritime Labour Convention sets baseline obligations for how seafarers are employed, paid and protected, and which country's social security regime applies can turn on which flag the yacht flies. This page sets out what the rules require, flag by flag where the flag makes the difference, and what a payroll provider takes on beyond that baseline. WhichFlagToFly cites each flag's own published position rather than restating the Convention alone.
Does every yacht crew member need a written employment agreement?Link to this section
The Maritime Labour Convention requires a seafarers' employment agreement signed by both the seafarer and the shipowner, or clear evidence of an equivalent contractual arrangement, before a crew member goes to work aboard a Convention-covered yacht. The agreement has to set out working and living conditions as well as the wage and start date, and this applies to privately owned yachts engaged in commercial activity in the same way it applies to any other commercial ship.
Exactly what form the agreement takes and how it is approved differs by flag. Malta's position: Every Maltese ship must sign a written agreement with each seafarer, in duplicate; yachts in non-commercial use sit outside these rules.S.L. 234.51 Merchant Shipping (Maritime Labour Convention) Rules, Legal Notice 145 of 2013 as amended by L.N. 262 of 2013, 390 of 2016, 465 of 2020 and 26 of 2025, legislation.mt (Office of the State Advocate)legislation.mt · rule 20(1)Retrieved 2026-08-29Open sourceInformational only, not legal, tax or financial advice. Contact a qualified professional for current information. Each other flag's is on its own register page. The Convention's own baseline, which applies underneath whatever a specific flag adds on top, is the standard every agreement has to clear at a minimum.
Which country's social security do your crew pay into?Link to this section
For an EU-flagged yacht, the EU social security coordination regulation generally treats work aboard the vessel as work performed in the flag state itself, which routes an EU-resident crew member's contributions there by default unless their employer is based in the crew member's own country of residence. Under a Red Ensign or an open-registry flag the EU coordination rule does not apply, so the outcome is different.
Malta's position: Work on a Malta-flagged vessel counts as work in Malta for social security, unless crew are paid by an employer in their state of residence.Regulation (EC) No 883/2004 of the European Parliament and of the Council on the coordination of social security systems, consolidated text of 1 January 2014 (CELEX 02004R0883-20140101), EUR-Lexeur-lex.europa.eu · Art. 11(4)Retrieved 2026-08-28Open sourceInformational only, not legal, tax or financial advice. Contact a qualified professional for current information. Madeira, under Portugal's international shipping register, publishes its own opt-out arrangement for non-Portuguese crew alongside a reduced contribution rate for Portuguese crew who remain covered: Crew who are neither Portuguese nationals nor resident in Portugal are exempt from Portuguese social security if another protection scheme is in place; Portuguese crew are covered at a reduced combined rate of 2.7 percent (2.0 percent employer, 0.7 percent employee).Shipowners, International Business Centre of Madeira (SDM, Sociedade de Desenvolvimento da Madeira, the concessionaire of the Madeira International Shipping Register)www.ibc-madeira.comRetrieved 2026-08-28Corroborating source, not the register's own publicationOpen sourceInformational only, not legal, tax or financial advice. Contact a qualified professional for current information. Which regime applies to a specific crew member depends on their residence and their employer as well as the flag, so confirm it for each crew member rather than assuming.
What does a payroll provider take on?Link to this section
Many management companies and specialist providers run crew payroll as a distinct service from placement, typically acting as employer of record or as paying agent, handling net pay in the currencies crew are paid in, managing social security and pension contributions where they arise, and keeping the seafarer employment agreements and pay records an inspection may ask to see aboard. It does not settle which jurisdiction's rules the arrangement assumes; ask a provider that directly rather than taking it on trust. See yacht management for how payroll usually sits inside a wider management relationship.
What does running crew payroll cost?Link to this section
A payroll provider is paid a fee per crew member per month on top of the wages, contributions and any pension it passes through. No neutral source publishes a band for that fee, and no flag publishes one either, so this page states none. Ask a provider to quote against the crew list, the flag and each crew member's residence.
What happens if wages go unpaid?Link to this section
The Maritime Labour Convention requires every Convention-covered flag to have a financial security system in place for its ships, so a crew member is not left unprotected if wages go unpaid or a vessel is effectively abandoned. Evidence of that cover is carried aboard. It is a flag-level baseline rather than a payroll provider's own guarantee, and it applies whether or not the owner has appointed a payroll provider.
Placement or payroll: which do you need?Link to this section
Placement is the service of finding and vetting crew; payroll is the service of employing and paying them once found, and a yacht can use one without the other. The Convention makes one point that applies whichever service is engaged: recruitment and placement costs fall on the employer, not the seafarer, so a compliant placement service does not charge the crew member for being found work. See how yacht crew placement works and crew placement for the placement side, and ISM, ISPS and MLC for yachts for how crew obligations sit inside the wider compliance picture.
Compare the registers
The registers themselves are compared side by side, fee by fee, on their own pages.
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