Malta Budget 2027 EURO 1000 bonus for workers higher pensions and major tax cuts for families and businesses

November 02 2026 08:32:57 by PCLMedia

From a €1,000 tax-free bonus for workers to increased pensions, enhanced support for carers and a lower company tax rate, Budget 2027 introduces a series of measures aimed at putting more money into people's pockets, supporting vulnerable households and strengthening Malta's business environment.

Budget 2027 brings a wide-ranging package of financial measures affecting workers, pensioners, families, people with disabilities, carers and businesses. With increases in weekly income, new financial assistance and further tax reductions, the measures are designed to provide support across different stages of life while addressing the rising cost of living.

Here is a closer look at the key numbers and what they mean for individuals and businesses.

Workers to receive a €1,000 tax-free bonus

One of the headline announcements is a €1,000 non-taxable bonus for every worker earning €12,000 or more annually.

The measure has a broad reach, covering employees, self-employed individuals, working pensioners and part-time workers. Those earning less than €12,000 will not be excluded, with a pro-rata payment applying and a guaranteed minimum bonus of €500.

This means that the benefit is not limited to full-time employees or those earning higher salaries. It also recognises the contribution of people working part-time and those who remain economically active beyond retirement age.

For many households, the bonus will provide a welcome financial boost, particularly as everyday expenses continue to put pressure on family budgets.

COLA and minimum wage increases

The Cost of Living Adjustment (COLA) for 2027 has been set at €6.41 per week, providing an adjustment to wages to help workers cope with rising prices.

The minimum wage will increase by €10.41 per week, including COLA.

The increase is particularly relevant to lower-income earners, for whom even relatively modest weekly adjustments can make a meaningful difference to household finances.

While the COLA provides a general cost-of-living adjustment, the additional minimum wage increase offers further support to those at the lower end of the income scale.

Pensioners to receive an additional €10 per week

Pensioners will benefit from a €10 weekly increase in their pension, including COLA.

The measure continues the focus on improving retirement income and helping older people manage their daily expenses, from groceries and household bills to healthcare and other essential needs.

Another important announcement concerns pensioners' tax-free income threshold, which will rise to €37,624 annually.

This increase will allow pensioners to receive a higher level of income before becoming liable for income tax, offering additional financial breathing space to retirees.

Meanwhile, elderly people who do not receive a pension will benefit from an increase of €333 in their annual bonus. This will bring the bonus to between €933 and €1,383, depending on the applicable entitlement.

Together, these measures extend support beyond pension increases alone, recognising the different financial circumstances of Malta's older population.

Second consecutive tax cut for parents

Families with children will benefit from another reduction in income tax from January 2027.

This is the second stage of a three-year programme aimed at reducing the tax burden on parents. The first reduction was introduced in 2026, while the final stage is scheduled for 2028.

Through progressive adjustments to tax brackets, parents are expected to benefit from significant savings, with the overall measure valued at €160 million over three years.

The objective is to leave families with more disposable income, helping parents manage the costs associated with raising children, including education, childcare, food and other household expenses.

For families already benefiting from the first phase, the 2027 adjustment will represent another step towards a lower tax bill.

Adoption grant rises to €13,000

Financial assistance for families adopting children will also increase.

The adoption grant will rise by €1,000 to €13,000, providing additional financial support to parents undertaking the adoption process.

Adoption can involve considerable financial and administrative commitments. Increasing the grant is intended to ease some of these costs and provide greater assistance to families welcoming a child into their home.

More financial support for carers

Budget 2027 also places emphasis on supporting people who dedicate their time to caring for family members and vulnerable individuals.

The Carers' Grant will increase to €7,500 per year, offering greater financial assistance to those providing care.

Similarly, the grant for elderly people receiving care at home will increase by €800, reaching €9,800 annually.

These increases recognise the importance of home-based care and the contribution made by family members and carers who help older people maintain their independence and quality of life.

For households managing the demands of caring for an elderly relative, additional financial assistance can help make home care more sustainable.

Free therapy for children and teenagers with disabilities

One of the significant measures in the social sector is the introduction of free therapy for children and teenagers under the age of 18.

Removing the cost of therapy for this age group represents an important step towards improving access to essential support services.

For families of children with disabilities or additional developmental needs, therapy can be an ongoing expense. Making these services free will help reduce the financial pressure on parents while supporting children's development and wellbeing.

The measure also reinforces the importance of ensuring that access to essential therapeutic services is not determined by a family's financial circumstances.

Smaller businesses to benefit from lower company tax

Budget 2027 also introduces a notable change for smaller businesses.

Companies with an annual turnover not exceeding €1 million will see their top tax rate reduced from 35% to 25%.

This represents a reduction of 10 percentage points and is intended to provide greater financial flexibility to smaller enterprises.

For eligible businesses, a lower tax burden could help improve cash flow, support reinvestment, facilitate business expansion and create opportunities for further growth.

Small and medium-sized enterprises play an important role in Malta's economy, employing people across numerous sectors. Measures that improve their financial position can therefore have wider economic benefits.

The change is particularly relevant for smaller companies looking to strengthen their operations while managing rising costs and maintaining competitiveness.

Budget 2027: The key figures at a glance

Measure	Budget 2027 figure
Non-taxable worker bonus	€1,000
Minimum bonus for lower earners	€500
Annual earnings threshold for full bonus	€12,000
Weekly COLA	€6.41
Weekly minimum wage increase, including COLA	€10.41
Weekly pension increase, including COLA	€10
Pensioners' annual tax-free income	€37,624
Increase in elderly non-pensioners' bonus	€333
Elderly non-pensioners' annual bonus	€933–€1,383
Adoption grant	€13,000
Annual Carers' Grant	€7,500
Annual elderly home-care grant	€9,800
Parent tax reduction programme	€160 million over three years
Small companies' new top tax rate	25%, down from 35%

A budget focused on households, social support and business growth

The measures announced in Budget 2027 cover a broad range of needs, from immediate financial assistance for workers to longer-term support for families, pensioners and businesses.

The €1,000 tax-free bonus stands out as one of the most direct measures for workers, while the pension increases and higher tax-free income threshold offer additional support to older people.

For families, the continuation of parent tax cuts, alongside the increased adoption grant and free therapy for under-18s, addresses some of the financial responsibilities associated with raising children.

Carers and those looking after elderly relatives will also receive increased assistance, while smaller companies will have the opportunity to benefit from a significantly lower top tax rate.

Ultimately, the impact of Budget 2027 will be measured by how these announcements translate into improved financial security, greater opportunities and a better quality of life.

For workers, families, pensioners and businesses across Malta, the central message is clear: the budget seeks to distribute support across society, with particular attention to household finances, social wellbeing and economic activity.