Taxation in Malta

Malta operates a progressive income tax system, meaning the more you earn, the higher the tax rate applied to those higher earnings. Taxes and social security are automatically deducted from your salary by your employer through a system known as Final Settlement System (FSS) (similar to PAYE in the UK).

Your tax brackets depend entirely on your chosen Status:

• Single Rate: Applies by default to unmarried individuals, or married couples who choose to file separately. The tax-free threshold is €9,100.
• Married Rate: Applies to couples who are legally married and opt to file their taxes jointly. The tax-free threshold is higher (€12,700), making it beneficial if one spouse does not work or earns very little.
• Parent Rate: Applies to individuals who maintain a child (under 18, or under 21 if in tertiary education). The tax-free threshold is €10,500. This is highly advantageous for single working parents.

At the end of February each year, your employer will issue an FS3 form. This crucial document summarizes your total gross income, tax paid, and National Insurance contributions for the previous calendar year.

In addition to income tax, you are legally required to pay National Insurance (NI) / Social Security Contributions (SSC). This contribution is what entitles you to free public healthcare, sickness benefits, maternity benefits, and eventually a Maltese state pension.

How it's calculated:

• Employees pay 10% of their basic weekly wage.
• The employer also pays a matching 10% on your behalf (this employer portion is not deducted from your gross salary; it is an additional cost to the company).
• The Cap: NI contributions are capped. For 2026, the maximum contribution an employee makes is roughly €53.23 per week (approximately €2,768 per year). Once your salary exceeds roughly €27,000, your NI deduction maxes out, and you will not pay more than the cap regardless of how high your salary goes.

Government Tax Refund Cheques:

Every year (usually between April and June), the Maltese government mails a physical tax refund cheque to all workers earning under €60,000. Depending on your income bracket and tax status, this ranges from €60 to €140. Make sure your address is updated with Identità so you receive this cheque in the mail!

Highly Qualified Persons (HQP) Rules:

To attract top-tier international talent to specific growing sectors (Gaming, Aviation, and Financial Services), Malta offers the HQP scheme. If an expatriate works in an eligible senior role (e.g., CEO, Chief Risk Officer, Lead Actuary) and earns a gross salary exceeding a statutory minimum (approx. €75,000 for 2026), they can opt for a flat income tax rate of just 15% on all earnings up to €5,000,000.