What Changed in Malta’s 2026 Budget?
The headline personal-tax change in Malta’s 2026 Budget is the introduction of wider income-tax bands for qualifying families with children.
Four additional computations now sit alongside the standard single, married and parent tables:
- Married rates with one qualifying child
- Married rates with two or more qualifying children
- Parent rates with one qualifying child
- Parent rates with two or more qualifying children
These bands can reduce income tax significantly, but eligibility depends on official conditions. A taxpayer should not select a family table simply because it produces a lower calculation.
Other Budget measures affect pensions, property, care expenses, minimum pay, business investment and Malta’s tourism eco-contribution.
New Married Tax Bands for Families
Qualifying married taxpayers with one child use these 2026 bands:
- €0–€17,500: 0%
- €17,501–€26,500: 15%
- €26,501–€60,000: 25%
- More than €60,000: 35%
For married taxpayers with two or more qualifying children:
- €0–€22,500: 0%
- €22,501–€32,000: 15%
- €32,001–€60,000: 25%
- More than €60,000: 35%
The standard married computation remains available with a €15,000 zero-rate threshold, followed by the 15%, 25% and 35% bands.
New Parent Tax Bands
Qualifying parent-rate taxpayers with one child use:
- €0–€14,500: 0%
- €14,501–€21,000: 15%
- €21,001–€60,000: 25%
- More than €60,000: 35%
With two or more qualifying children, the bands are:
- €0–€18,500: 0%
- €18,501–€25,500: 15%
- €25,501–€60,000: 25%
- More than €60,000: 35%
The standard parent table starts with a €13,000 zero-rate band. The new tables widen the amount taxed at 0% and 15% for eligible parents.
The complete tables are explained in Malta Tax Rates 2026.
Worked Example: €30,000 Married Income
The Budget’s effect becomes clearer when the same chargeable income is tested under different computations.
Standard Married Rates
At €30,000, the applicable rate is 25% with a €4,550 subtraction:
€30,000 × 25% − €4,550 = €2,950
Married Rates With One Child
The applicable calculation uses 25% and a €5,275 subtraction:
€30,000 × 25% − €5,275 = €2,225
Compared with standard married rates, the reduction is:
€2,950 − €2,225 = €725
Married Rates With Two or More Children
At €30,000, this income remains inside the 15% band. The subtraction is €3,375:
€30,000 × 15% − €3,375 = €1,125
The difference from standard married rates is:
€2,950 − €1,125 = €1,825
These figures calculate personal income tax only. Social Security Contributions and other payroll deductions remain separate.
The Budget Malta Tax Calculator can compare supported 2026 family computations using employment income and taxable extras.
Worked Example: €30,000 Parent Income
Under standard parent rates:
€30,000 × 25% − €3,700 = €3,800
Using parent rates with one qualifying child:
€30,000 × 25% − €4,275 = €3,225
The resulting reduction is €575.
Using parent rates with two or more qualifying children:
€30,000 × 25% − €5,325 = €2,175
The reduction compared with standard parent rates is €1,625.
Use the Malta Tax Calculator to test chargeable income against the applicable status. Official eligibility must still be confirmed independently.
The Family Tax Changes Continue Beyond 2026
The wider family bands form part of a three-year introduction rather than a one-year measure.
Further widening is planned for 2027 and 2028. For example, the tax-free threshold for a parent computation with two or more children is intended to rise from €18,500 in 2026 to €24,000 in 2027 and €30,000 in 2028.
This does not mean taxpayers should use the future threshold for 2026 income. Each year requires the table officially applicable to that basis year.
COLA and Minimum Pay
The Cost of Living Adjustment for 2026 is €4.66 per week for a full-time employee, with a proportional entitlement for part-time employees.
Malta’s national minimum wage for employees aged 18 or over is €229.44 per week in 2026. The published minimum already reflects the rate applicable for the year, so COLA should not simply be added to it again.
The age rates and pay-period conversions are covered in Malta Minimum Wage 2026.
Pension and Care-Expense Measures
The pension-income exemption phase reached 100% for 2026, subject to the applicable limits and conditions. Tax treatment can differ where a person has pension income alongside earnings from other sources.
The allowable deduction cap for qualifying fees paid to homes for elderly people or persons with disabilities increased from €2,500 to €4,500.
These provisions should be applied using the detailed legal conditions, not treated as automatic deductions for every pensioner or care payment.
Property and Business Measures
The reduced 3.5% duty treatment for inherited property used as an individual’s own residence was extended from the first €200,000 to the first €400,000, subject to the scheme’s conditions.
The first-time buyer scheme was also made permanent. Business measures included expanded investment incentives, higher Micro Invest limits and enhanced deductions for eligible research, digitalisation, automation and cybersecurity expenditure.
The tourism eco-contribution increased from €0.50 to €1.50 per night. This affects eligible accommodation stays rather than ordinary employment payroll.
What Employees Should Check
Before comparing 2025 and 2026 take-home pay, confirm:
- Chargeable income
- Applicable tax status
- Number of qualifying children
- Employee SSC category
- Taxable bonuses or additional income
- Other payroll deductions
The Malta Salary Tax Calculator can show an indicative combined tax and SSC result. More planning tools are available on Malta Calculators.
The family-tax policy and its staged introduction were announced in the official Government release. Final eligibility and payable tax should always be checked against current MTCA guidance.
Frequently Asked Questions
Q:1 What is the main Malta Budget 2026 tax change?
A: Four wider tax computations were introduced for qualifying married and parent taxpayers with children.
Q:2 Did the highest personal tax rate change?
A: No. The highest rate remains 35% on chargeable income above €60,000.
Q:3 Does every parent automatically qualify for the new bands?
A: No. The official child, status and other eligibility conditions must be satisfied.
Q:4 What is the 2026 weekly COLA increase?
A: The full-time Cost of Living Adjustment is €4.66 per week.
Q:5 Are Social Security Contributions included in the tax examples?
A: No. SSC is a separate payroll deduction.
Q:6 Will the family bands change again?
A: Further staged widening is planned for 2027 and 2028, subject to the officially applicable rules.