Overview
Malta uses a progressive income tax system, meaning higher earners pay a higher rate. Talexio uses previous payroll data, engagement date, bonuses, and income fluctuations to calculate precise tax amounts each period. By dynamically adjusting for these variables, Talexio ensures year-round accuracy and reduces year-end tax bills or refunds. Tax is handled via a Pay As You Earn (PAYE) framework known as the Final Settlement System (FSS), where your employer deducts the required tax from your payslip.
Permissions
You will need the Manage Payroll permission to access the Payroll section, which is where tax is calculated.
Tax status
To see which one of these statuses an employee falls under, you will need to refer to their FS4. It is important to note that each employee's tax status is not necessarily the same as the employee's marital status. So if a person is married to another person, the employee does not automatically qualify for the married tax rates. Read on for more details on each tax status.
There are 7 different tax statuses for individual employees:
- These rates are applicable when the employee is not a parent, and their civil status is single or not currently married (i.e. widowed, separated, annulled or divorced). These rates also apply if the employee is currently married and the couple are both in full time employment.
- These rates are applicable when the employee does not have children and is married, but also bearing in mind the below criteria:
- The couple must be living together;
- The employee is an EU or EEA national who derives at least 90% of their income from Malta; and
- Only one person from the couple works in full time employment.
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These rates are applicable to resident married couples in Malta who maintain one child under their custody (said child must not be over 18 years of age (or not over 23 if in full-time education)) and satisfy the Married Tax Rates criteria above.
Alternatively, the married rates apply to an employee who is a single parent. In this case, the employee:
- Must not be married;
- Must not be living with the other parent of the child;
- Must be the sole beneficiary of social benefits on behalf of the child; and
- Must have full custody of the child who has not yet reached their 18th year or has not reached their 23rd year and is studying in tertiary education or has a severe disability.
- These rates are applicable to resident married couples in Malta who maintain two or more children under their custody (said children must not be over 18 years of age (or not over 23 if in full-time education)) and satisfy the Married Tax Rates criteria above.
- These rates apply to resident individuals who do not qualify for the below parent, and who maintain under their custody (or pays maintenance in respect of) children who are not over 18 years of age (or not over 23 if in full-time education).
- These rates apply to a parent who maintains under their custody (or pays maintenance in respect of) one child who is not over 18 years of age (or not over 23 if in full-time education). Beyond these conditions, the individual must satisfy one of these two criteria
- The individual or their spouse must be a Maltese national or a national from an EU/EEA member state; or
- The individual or their spouse is a long term resident of Malta as defined in the Status of Long-Term Residents Regulations, and the child is born in Malta and is resident in Malta.
- These rates apply to a parent who maintains two or more children under their custody (or pays maintenance in respect of) two or more children who are not over 18 years of age (or not over 23 if in full-time education). Beyond these conditions, the individual must satisfy one of these two criteria
- The individual or their spouse must be a Maltese national or a national from an EU/EEA member state; or
- The individual or their spouse is a long term resident of Malta as defined in the Status of Long-Term Residents Regulations, and the child is born in Malta and is resident in Malta.
The rates for the current and upcoming years in accordance with the Malta Tax and Customs Administration can be found here:
Tax Rates 2026 Chargeable Income (€) From To Rate Subtract Single Rates € 0.00 € 12,000.00 0% € 0.00 € 12,001.00 € 16,000.00 15% € 1,800.00 € 16,001.00 € 60,000.00 25% € 3,400.00 € 60,001.00 and over 35% € 9,400.00 Married Rates € 0.00 € 15,000.00 0% € 0.00 € 15,001.00 € 23,000.00 15% € 2,250.00 € 23,001.00 € 60,000.00 25% € 4,550.00 € 60,001.00 and over 35% € 10,550.00 Married Computation with One Child € 0.00 € 17,500.00 0% € 0.00 € 17,501.00 € 26,500.00 15% € 2,625.00 € 26,501.00 € 60,000.00 25% € 5,275.00 € 60,001.00 and over 35% € 11,275.00 Married Computation with Two Children or more € 0.00 € 22,500.00 0% € 0.00 € 22,501.00 € 32,000.00 15% € 3,375.00 € 32,001.00 € 60,000.00 25% € 6,575.00 € 60,001.00 and over 35% € 12,575.00 Parent Computation with One Child € 0.00 € 14,500.00 0% € 0.00 € 14,501.00 € 21,000.00 15% € 2,175.00 € 21,001.00 € 60,000.00 25% € 4,275.00 € 60,001.00 and over 35% € 10,275.00 Parent Computation with Two Children or more € 0.00 € 18,500.00 0% € 0.00 € 18,501.00 € 25,500.00 15% € 2,775.00 € 25,501.00 € 60,000.00 25% € 5,325.00 € 60,001.00 and over 35% € 11,325.00 Tax Rates 2027 Chargeable Income (€) From To Rate Subtract Maximum Tax Saving Married Computation with One Child € 0.00 € 20,000.00 0% € 0.00 € 750.00 € 20,001.00 € 30,000.00 15% € 3,000.00 € 1,450.00 € 30,001.00 € 60,000.00 25% € 6,000.00 € 1,450.00 € 60,001.00 and over 35% € 12,000.00 € 1,450.00 Married Computation with Two children or more € 0.00 € 30,000.00 0% € 0.00 € 2,950.00 € 30,001.00 € 41,000.00 15% € 4,500.00 € 4,050.00 € 41,001.00 € 60,000.00 25% € 8,600.00 € 4,050.00 € 60,001.00 and over 35% € 14,600.00 € 4,050.00 Parent Computation with One Child € 0.00 € 16,000.00 0% € 0.00 € 450.00 € 16,001.00 € 24,500.00 15% € 2,400.00 € 1,150.00 € 24,501.00 € 60,000.00 25% € 4,850.00 € 1,150.00 € 60,001.00 and over 35% € 10,850.00 € 1,150.00 Parent Computation with Two Children or more € 0.00 € 24,000.00 0% € 0.00 € 2,300.00 € 24,001.00 € 33,500.00 15% € 3,600.00 € 3,250.00 € 33,501.00 € 60,000.00 25% € 6,950.00 € 3,250.00 € 60,001.00 and over 35% € 12,950.00 € 3,250.00 Tax Rates 2028 Chargeable Income (€) From To Rate Subtract Maximum Tax Saving Married Computation with One Child € 0.00 € 22,500.00 0% € 0.00 € 1,125.00 € 22,501.00 € 33,500.00 15% € 3,375.00 € 2,175.00 € 33,501.00 € 60,000.00 25% € 6,725.00 € 2,175.00 € 60,001.00 and over 35% € 12,725.00 € 2,175.00 Married Computation with Two children or more € 0.00 € 37,000.00 0% € 0.00 € 4,700.00 € 37,001.00 € 50,000.00 15% € 5,550.00 € 6,000.00 € 50,000.00 € 60,000.00 25% € 10,550.00 € 6,000.00 € 60,001.00 and over 35% € 16,550.00 € 6,000.00 Parent Computation with One Child € 0.00 € 18,000.00 0% € 0.00 € 800.00 € 18,001.00 € 28,000.00 15% € 2,700.00 € 1,800.00 € 28,001.00 € 60,000.00 25% € 5,500.00 € 1,800.00 € 60,001.00 and over 35% € 11,500.00 € 1,800.00 Parent Computation with Two Children or more € 0.00 € 30,000.00 0% € 0.00 € 3,800.00 € 30,001.00 € 42,000.00 15% € 4,500.00 € 5,000.00 € 42,001.00 € 60,000.00 25% € 8,700.00 € 5,000.00 € 60,001.00 and over 35% € 14,700.00 € 5,000.00
Different Tax Rate Types
There are different tax rates. On Talexio, these can be selected from the employee's position (under 'Other Payroll Information').
The Tax Rate Type is different to the Tax Status. The former relates to the rate of tax an individual will be paying (such as Qualified person rates which are fixed at 15% or Part time rates which are fixed at 10%). Tax Status is essentially a subset of the Standard/Main tax rates, and determines the rate of tax which a person who falls under such tax rate will pay.
The different options here are:
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Main Tax (or standard) rate type refers to the progressive income tax rates. This applies to employees whose position refers to their principal source of income.
The tax statuses (Single, Married, Married with 1 Child, Married with 2 or more Children, Parent, Parent with 1 Child, and Parent with 2 or more Children) only apply to this tax rate type.
The calculation also considers previous employment income within that same year, which is why it is crucial that FS3 data is uploaded when onboarding a new employee after 1st of January. Below you will find an explanation of the tax calculation for such tax rate type.
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Part Time Tax rate type applies in the below scenarios:
- The employee has a full time employment elsewhere or is married to someone who is in full time employment; and
- The employee's part time role is not more than 30 hours per week
or
- The employee's part time role is not more than 30 hours per week; and
- The employee is a locally taxed pensioner or is a student.
This is applicable up to the first €10,000 which an employee earns from part time work. This is not applicable on fringe benefits.
The rate is 10% of the gross. Once the €10,000 is skipped, the employee is taxed at 25%.
If an employee is on the part time tax rates and is also earning fringe benefits as part of their salary package, these are taxed at the main tax rates. Click here to read more on Fringe Benefits.
- A Highly Qualified Person is a specialised professional from abroad who has at least 5 years of experience and the specific qualifications required to fill top-level executive or technical roles. Such employees' employment income is taxed at a flat 15% provided they earn more than the minimum indexed threshold.
- Income from Sports activities is taxed at a flat 7.5% rate.
- This refers to a special tax scheme designed for creative practioners and artists who work for themselves on a full or part time basis. If eligible for this tax rate, artists are taxed a flat 7.5% rate on their first €50,000 in respect of artistic earnings, provided such work has been officially certified by the Arts Council Malta.
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Non-Residents are taxed as follows:
Annual Income Multiply By Subtract €0 - €700 0.00 €0 €701 - €3100 0.20 €140 €3101 - €7800 0.30 €450 €7801 and over 0.35 €840 - This relates to any other specific tax rate. By selecting this option, you will also be prompted to specify the tax rate: