Malta’s 2026 Budget is here, with a mix of measures that will affect employees, employers, and payroll operations.
From tax relief for families to incentives for retaining staff, plus new residency and tax regimes, this Budget has something for everyone. Payroll and HR teams will need to act fast to update systems, communicate changes, and maximise the opportunities.
To reward long-term employees, the Budget will subsidise pay rises for workers who have spent four or more years with the same company, covering 65% of the increase in Malta and 80% in Gozo. This helps businesses recognise loyalty while sharing the cost with the Government.
Other measures impacting employers include:
Payroll teams should track these subsidies and ensure contracts reflect new entitlements.
Supporting parents remains a central theme. New income tax thresholds for parents with dependent children mean higher take-home pay, while grants and allowances have been increased to ease the cost of raising children.
Highlights:
Updating payroll systems and ensuring accurate pension calculations will be crucial for compliance and employee communication.
To prepare for the 2026 Budget and related legislation, payroll, HR and mobility teams should:
Malta’s 2026 Budget, alongside residency and tax incentives, underscores the country’s focus on families, talent retention, and attracting global business. By taking a proactive approach, payroll and HR teams can ensure compliance, streamline processes, and help employees make the most of these changes.
Two legislative updates complement the Budget and impact payroll and mobility planning.
Malta Permanent Residence Programme (MPRP)
The MPRP has been updated with simplified contributions, temporary residence cards during processing, and expanded property leasing options. Employers managing international assignees should note potential payroll and benefits implications.
Senior Employees of Family Offices, Back-Offices, and Treasury Management Operations
Legal Notice 250 of 2025 introduces a flat 15% tax rate for qualifying senior professionals in family offices, back-office, or treasury roles. Key points:
Payroll teams should review contracts, verify eligibility, and ensure compliance with the new tax treatment.
We support businesses managing global payroll, international assignments and evolving tax-residence issues.
For tailored guidance on how these Malta developments affect your business or for support with implementation, please complete our Contact Us form, and a member of our team will be happy to assist with your queries.