Service charge in the Maldives: who must collect it, how staff share it and when it is paid (2026)

Service charge is mandatory for tourism businesses in the Maldives. They must add at least 10% to every service and share all of it equally among their employees, keeping no more than 1%.

Each month's service charge must reach staff before the end of the following month. The rules are in section 52 of the Employment Act and the Regulation on Service Charge, 2021/R-41.

Where the rules come from

The Sixth Amendment to the Employment Act, ratified on 22 September 2020, made service charge compulsory in tourism. The Labour Relations Authority then gazetted the Regulation on Service Charge on 16 March 2021 (LRA announcement).

Tourism businesses have had to levy service charge since 1 January 2021, whether or not they were properly licensed (Regulation, section 3(d)). The Labour Relations Authority (LRA) enforces the rules; the employment law guide covers the rest of the Act.

Who must collect service charge

The tourism businesses listed in section 3 of the Regulation must add at least 10% service charge to all their services. They are:

• tourist resorts, integrated tourist resorts and private islands;
• tourist hotels, city hotels, transit hotels and training resorts;
• tourist guesthouses;
• tourist vessels and yacht marinas.

Businesses that serve these places must levy it too. Diving schools and centres, spas, water sports, excursions and cafes or restaurants all count, including services run by an outsourced company (section 3(a)).

Some sales are exempt:

• cafes, restaurants and canteens set up only for staff (section 3(b));
• goods sold in shops whose main business is selling goods (section 3(c)).

When a whole resort, hotel or block of rooms is rented out for a fixed price, service charge is due on the full amount. A chartered tourist vessel pays it on the charter fee (section 4).

The charge must appear on each bill (section 4(e)). Businesses outside tourism may add service charge if they choose, but then they must share and report it under the same rules (section 5).

How much goes to staff

All of it, less an administrative fee of at most 1% that the employer may keep each month. The employer "shall not retain more than the amount stated under any circumstance" (Regulation, section 8; Employment Act, section 52(d)).

The rest is shared equally among all employees who contribute "directly or indirectly" to the employer's services. Nobody other than the employer's own employees may receive any of it (section 7(d)).

An employee is "anyone who works for a salary or a wage" (section 17). Nationality, job title and salary make no difference to your share, and the Act forbids discrimination between employees who contribute to the services (section 52(b)).

Service charge from different outlets at the same location is pooled and shared together (section 7(a)). Two rules keep pools apart:

• Service charge from businesses at different locations is not pooled (section 7(b)).
• An outsourced business on the same site, such as a spa run by another company, shares its service charge among its own staff (section 7(c)).

How your share is calculated

Your share depends on how many days you worked in the month, not on your pay. Section 9 of the Regulation sets the method:

1. 01Take the month's total service charge, less any administrative fee of up to 1%.
2. 02Divide it by the total number of days worked by all eligible employees that month. That gives the average service charge per day.
3. 03Multiply the average per day by the number of days you worked.

Paid leave and the rest days allowed under the Employment Act count as days worked (section 9(c)). So you do not lose service charge for taking your annual leave or your day off.

So two people who worked the same number of days in the same pool get the same amount, and someone who joined halfway through the month gets about half of a full month's share.

Service charge counts in the month the guest received the service, even if the guest paid in advance or pays later in instalments (section 6).

When it is paid and what you must be told

The previous month's service charge must be paid in full before the end of the current month (Regulation, section 10). For example, service charge for September 2026 must be paid by the end of October 2026.

Before the end of each month, the employer must tell staff two figures for the previous month (section 11):

• the total service charge it received;
• the amount calculated for each employee.

Neither the Employment Act nor the Regulation says which currency service charge must be paid in. Check your contract and the monthly notice.

Service charge and the minimum wage

Service charge does not count towards the minimum wage. The Minimum Wage Order lists it among payments that "may not be included" (clause 1.2(c)).

The minimum wage itself applies only to employees who are not expatriates, from 1 January 2022. Your basic salary and fixed allowances must reach it on their own; the minimum wage guide gives the rates.

Records, reports and fines

Employers must keep monthly service charge records (Regulation, section 12). They send them to the LRA and the Maldives Inland Revenue Authority (MIRA) twice a year (section 14). The records include:

• the total received and any administrative fee kept;
• the name, ID or passport number and job title of each employee;
• the days each employee worked, the daily rate, and the amount paid to each.

Figures for January to June are due before 1 October, and for July to December before 1 April. MIRA checks them for businesses that file tax returns (section 15).

The LRA imposes the fines (section 16). It can also take administrative action against a tourism business that does not collect or share service charge (Employment Act, section 52(h)).

Why amounts differ between resorts

Service charge figures vary by resort and by month, because each business shares a percentage of its own sales. A busy month at a full resort produces more than a quiet month at a small guesthouse.

The share per day also falls when more staff share the same pool. Ask an employer what its recent monthly service charge has been before you accept an offer, and compare offers on salary plus service charge.

If your service charge is not paid

Start with your employer, then go to the LRA. The Employment Act covers expatriates as well as Maldivians (LRA FAQ).

1. 01Ask human resources for the monthly service charge notice that section 11 requires, and keep your payslips.
2. 02Raise the problem in writing and keep a copy of your message and the reply.
3. 03File a complaint with the LRA using its online form. Choose the closest category, such as "Others", and explain that service charge was not paid.
4. 04You can also take a claim to the Employment Tribunal. Foreign employees can do this for breaches of their employment agreement (Employment Act, section 66).

The LRA is at Ma. Kan'dubalaage, Buruzu Magu, Malé, on +960 332 8282 or [email protected], Sunday to Thursday, 08:00 to 14:00 (contact page).

The Act protects people who complain. The LRA may not give your details to your employer, and inspectors may not say a visit followed your complaint (section 84(c)). For advice on your own case, contact the LRA directly.

Questions people ask

Is service charge mandatory in Maldives?

Yes, for tourism. Resorts, hotels, guesthouses, tourist vessels and similar businesses must add at least 10% service charge to all services. Other businesses may choose to add it, and then must follow the same sharing rules.

How much service charge do resort staff get?

It varies by resort and by month. The employer must share everything it collects, less at most 1%, equally among staff for each day worked. Your share is the month's daily average multiplied by your days worked.

When is service charge paid in the Maldives?

By the end of the following month. Service charge for September 2026, for example, must be paid before the end of October 2026. The employer must also tell staff the total received and the amount per employee before each month ends.

Do foreign workers get service charge?

Yes. The rules cover anyone who works for a salary or a wage, and the Act forbids discrimination between employees who contribute to the services. Staff of an outsourced company on the same site share their own company's service charge.

Does service charge count towards the minimum wage?

No. The Minimum Wage Order excludes service charge, so your basic salary and fixed allowances must meet the minimum wage on their own. The minimum wage applies only to employees who are not expatriates.

What can I do if my employer does not pay service charge?

Ask human resources for the monthly service charge notice, then complain to the Labour Relations Authority through its online form or on +960 332 8282. You can also take a claim to the Employment Tribunal.