Understanding the Maltese Tax System
Malta operates a progressive income tax system where the rate of tax increases as the individual's income rises. For foreign nationals, the amount of tax owed depends significantly on their residency status and domicile. The tax year in Malta follows the calendar year, running from January 1 to December 31.
As of 2025 and 2026, the system continues to use the Final Settlement System (FSS) for employees. This means that income tax and social security contributions are deducted directly from your gross salary by your employer and remitted to the Malta Tax and Customs Administration (MTCA). You can find official resources and forms on the Commissioner for Revenue website.
Tax Residency and Domicile Status
For foreigners living in Malta, it is critical to distinguish between being a "resident" and being "domiciled." These statuses determine which parts of your worldwide income are subject to Maltese tax.
- Ordinary Residents: Generally, individuals who spend more than 183 days in Malta during a calendar year are considered tax residents.
- Non-Domiciled Residents (Non-Doms): Most expats are residents but not domiciled in Malta. In this case, you are only taxed on income arising in Malta and foreign income that is remitted (brought into) Malta. Foreign capital gains are typically not taxed, even if remitted.
- Minimum Tax: Non-domiciled individuals who are ordinary residents and earn at least 35,000 EUR ($40,600 USD, Jan 2026) in foreign income (even if not remitted) may be subject to a minimum tax of 5,000 EUR ($5,800 USD, Jan 2026) per year.
Income Tax Rates (2025-2026)
Tax brackets are categorized into Single, Married, and Parent rates. Recent updates for 2026 have introduced expanded tax-free thresholds for parents with children to support families.
Single Rates
Applicable to single individuals or married individuals opting for separate computation:
- 0 – 12,000 EUR ($13,920 USD, Jan 2026): 0%
- 12,001 – 16,000 EUR ($18,560 USD, Jan 2026): 15%
- 16,001 – 60,000 EUR ($69,600 USD, Jan 2026): 25%
- 60,001+ EUR ($69,600+ USD, Jan 2026): 35%
Parent Rates (Standard)
Applicable to parents maintaining children under 18 (or 23 if in full-time education):
- 0 – 13,000 EUR ($15,080 USD, Jan 2026): 0%
- 13,001 – 17,500 EUR ($20,300 USD, Jan 2026): 15%
- 17,501 – 60,000 EUR ($69,600 USD, Jan 2026): 25%
- 60,001+ EUR ($69,600+ USD, Jan 2026): 35%
Note: For the 2026 basis year, specific higher thresholds apply for parents with one child (14,500 EUR / $16,820 USD) or two or more children (18,500 EUR / $21,460 USD).
Social Security and Payroll Basics
In addition to income tax, both employees and employers must pay Class 1 Social Security Contributions (NI). These contributions fund the national healthcare system, pensions, and unemployment benefits.
- Contribution Rate: For most employees, the rate is 10% of the basic weekly wage.
- 2026 Weekly Cap: For individuals born after 1962, the contribution is capped at 55.93 EUR ($64.88 USD, Jan 2026) per week for both the employee and the employer.
- Maternity Leave Fund: Employers pay an additional contribution of 0.30%, which is capped at 1.68 EUR ($1.95 USD, Jan 2026) per week in 2026.
- FS3 and FS4 Forms: The FS4 is a declaration form you fill out when starting a job to indicate your tax status (Single, Married, or Parent). At the end of the year, your employer provides an FS3, which summarizes your total earnings and tax paid.
The 10% tax rate on part-time work applies up to the first 10,000 EUR ($11,600 USD, Jan 2026) earned annually, provided the individual meets specific eligibility criteria.
