Employment and Pension Initiatives in the Malta Budget 2027

The employment measures announced in the Malta Budget 2027 affect several areas of workforce planning. These include the statutory wage floor, the cost of recruiting and retaining third-country nationals, new forms of employee leave and the Government’s broader objective of encouraging investment in technology, digitalisation, automation and workforce skills.

This publication is relevant to employers, business owners, HR teams, payroll professionals and organisations recruiting workers from outside the European Union.

The National Minimum Wage in Malta will increase by €10.41 per week in 2027, inclusive of the cost-of-living adjustment. The Budget states that this increase follows the agreement reached between the Government and the social partners in 2023.

The change will directly affect employees who are currently paid the statutory minimum. Its impact may, however, extend beyond those employees alone. Employers may also face pressure to preserve appropriate wage differentials between minimum-wage employees and workers occupying more senior or specialised roles.

The Government also intends to reconvene the Low Wage Commission during 2027. The Commission is expected to work towards a new agreement concerning the National Minimum Wage from 2028 onwards.

The cost-of-living adjustment in Malta for 2027 is €6.41 per week.

For employees earning the National Minimum Wage, the total weekly increase will be €10.41, inclusive of COLA. Employers should therefore distinguish between the general €6.41 cost-of-living adjustment and the total €10.41 increase applicable to the statutory minimum wage.

Employers should also consider whether a sector-specific Wage Regulation Order, collective agreement or individual employment contract creates additional obligations beyond the general COLA adjustment.

Employers should review the financial and organisational effect of the revised wage floor before updating their payrolls for 2027.

In particular, employers should review:

• employees currently earning the statutory minimum wage or an amount close to it;
• payroll and workforce budgets for 2027;
• existing salary bands and wage differentials;
• positions in which more senior employees are paid close to the revised minimum;
• employment contracts that refer directly to statutory wage levels;
• collective agreements and internal policies linked to the National Minimum Wage; and
• the combined effect of wage increases and other employment-related costs.

The practical issue is broader than payroll compliance alone. Businesses with substantial lower-paid workforces should assess whether the revised wage floor compresses existing salary bands.

Salary-band compression may arise where the difference between the remuneration of entry-level employees and that of more experienced employees becomes comparatively small. Employers may therefore need to consider whether wider remuneration adjustments are appropriate to preserve the intended structure of their workforce.

The higher cost of recruiting workers from outside the European Union is likely to be one of the most commercially significant employment measures arising from the Malta Budget 2027.

The fee for a new work-permit application will increase from €600 to €800 per person. This represents a €200 increase in the basic application charge.

In addition, a new €400 annual infrastructure contribution will apply to both new applicants and persons renewing their permits. Persons under the age of 18 will be excluded from this contribution.

The Budget also indicates that fees for various other permits issued by Identità will be revised upwards. Employers should therefore avoid treating the €800 application charge as the only potential foreign-recruitment cost requiring review.

What Is the New €400 Infrastructure Contribution?

The infrastructure contribution is a new annual charge affecting new applicants and persons renewing their permits. Based on the measures announced in the Budget, the contribution will amount to €400 per person per year, with an exclusion for persons under 18.

For a new applicant, the announced €800 work-permit application fee and €400 infrastructure contribution indicate a combined cost of €1,200, before any other applicable administrative or professional fees.

Employers should confirm the applicable payment process, legal responsibility for the charge and implementation arrangements once the relevant legislation or administrative guidance is published.

What Should Employers Budget for When Recruiting Non-EU Workers?

Businesses recruiting third-country nationals should review:

• the number of new work-permit applications expected during 2027;
• the number of existing permits due for renewal;
• the €800 fee applicable to a new work-permit application;
• the €400 annual infrastructure contribution;
• any other permit fees administered by Identità;
• recruitment, relocation and professional-service costs; and
• any agreed allocation of costs between the employer and the applicant.

The effect may be particularly relevant to businesses that recruit several workers from outside the European Union or operate in sectors that depend substantially on foreign labour.

The Malta Budget 2027 also announces new leave and social-security measures affecting particular categories of employees.

Additional Leave for Foster Parents

Foster parents will become eligible for an additional 10 working days of leave per year. Employers with eligible employees should monitor the implementing rules and update their leave policies and payroll processes where required.

Paid Sports Leave for Elite Athletes

Qualifying elite athletes participating in European or world championships will be eligible for 10 days of paid sports leave. The measure also extends to accompanying technical and medical personnel.

Employers should confirm the qualifying conditions, documentation requirements and applicable implementation process once the detailed rules are available.

Social-Security Credits for Temporary Career Breaks

The Budget also refers to social-security contribution credits of up to two years for employees who temporarily stop working because of domestic violence or mental-health difficulties.

This measure concerns social-security contribution records. Employers should distinguish it from a general statutory entitlement to two years of paid or unpaid leave unless the implementing legislation expressly provides otherwise.

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Pensioners Benefits in the Malta Budget 2027

All pensioners will receive an additional €10 per week, inclusive of the cost-of-living adjustment (COLA). The increase applies to retirement, invalidity, widows’ and age pensions.

Further measures include raising the maximum pensionable income to €28,000 for pensioners born before 1962, benefiting around 15,000 pensioners, including widows. More than 7,000 widows will also receive an additional increase, completing the reform whereby widows receive the full two-thirds pension entitlement.‍

Additional support includes increasing the annual bonus for people who do not have enough contributions to qualify for a pension by €333.32, bringing it to between €933 and €1,383 per year. The service-pension amount disregarded when calculating the social security pension will increase by €300 annually, while the full commuted amount will be disregarded for service pensioners aged 72.

From 2027, spouses will also be able to transfer surplus social security contributions between them, subject to the applicable parameters, helping spouses who otherwise do not have enough contributions to qualify for a pension. The measure is expected to benefit around 3,200 additional married women.

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The combination of higher statutory wages, additional permit costs and new leave measures makes workforce planning increasingly important for Malta employers.

Businesses should assess the overall cost of each role rather than considering salary, permits and administration separately. This assessment may include the cost of recruitment, onboarding, permits, employee retention, training, leave cover and salary progression.

Employers may also want to examine whether their existing workforce model remains sustainable, particularly where business growth has depended primarily on increasing employee numbers.

Malta’s Shift Towards Productivity, Technology and Skills

The Malta Budget 2027 employment measures form part of a broader economic policy rather than a series of isolated administrative increases.

The Budget indicates that Malta wants businesses to invest more in technology, digitalisation, modernisation and skills instead of relying primarily on continued increases in employee numbers. The Government also reiterates its intention to encourage investment in technology and productivity.

Existing Malta Enterprise incentives for digitalisation, automation and higher-value investment are expected to continue, alongside measures concerning emerging economic sectors and diversification.

For employers, this places greater importance on long-term workforce planning. Businesses may need to consider how technology, more efficient processes and employee development can support growth without depending exclusively on continuous workforce expansion.

What Does the Productivity Focus Mean for Employers?

Employers may wish to assess:

• which repetitive or administrative processes could be digitalised;
• whether existing technology is being used effectively;
• where employees require additional skills or training;
• whether job roles should be redesigned as operational processes change;
• how productivity can be measured without compromising employment standards;
• whether planned recruitment could be complemented by investment in technology; and
• whether relevant Malta Enterprise support may be available for planned investments.

Any restructuring, substantial change in employee duties or introduction of workplace monitoring technologies should be assessed in light of the employer’s contractual, employment-law and data-protection obligations.

Practical Takeaways for Malta Employers

1. Identify affected employees. Establish which employees currently earn the National Minimum Wage or sit close to the revised wage floor.
2. Update payroll forecasts. Include the €6.41 COLA and the total €10.41 minimum-wage increase where applicable.
3. Review salary differentials. Check whether the increase creates compression between entry-level and more senior salary bands.
4. Audit permit requirements. Identify new applications and renewals anticipated during 2027.
5. Review foreign-recruitment budgets. Account for the revised €800 application fee, the €400 annual contribution and any other applicable costs.
6. Update leave policies. Review the announced measures concerning foster parents, elite athletes and accompanying personnel.
7. Check contractual documentation. Review contracts, policies and collective arrangements that refer to statutory wage levels or employee entitlements.
8. Examine productivity opportunities. Consider where technology, digitalisation, training or process improvements could support sustainable growth.
9. Review available support. Assess whether planned digitalisation or automation projects may qualify for applicable Malta Enterprise incentives.
10. Monitor implementation rules. Follow the publication of legislation and administrative guidance giving effect to the announced Budget measures.

Legal Status of the Budget Measures

The measures discussed in this publication are based on announcements made in connection with the Malta Budget 2027. Some measures may require legislation, regulations or administrative guidance before they become fully operational.

Employers and applicants should therefore confirm the final legal provisions, commencement dates, eligibility conditions and administrative procedures before acting on a Budget announcement.

Interested in Other Measures Announced in Malta Budget 2027?

• Read our analysis of the Malta Budget 2027 measures in Business, Technology and Sustainable Investment
• Read our overview of Malta Budget 2027 Income Tax and Business Tax Measures
• Read our analysis of Malta Budget 2027 Property Tax and Stamp Duty Measures

View the official Malta Budget 2027 documents published by the Ministry for Finance.

[question]How much will the National Minimum Wage increase in Malta in 2027?[/question]

[answer]The National Minimum Wage will increase by €10.41 per week in 2027. This figure includes the 2027 cost-of-living adjustment.[/answer]

[question]What is the COLA in Malta for 2027?[/question]

[answer]The cost-of-living adjustment for 2027 is €6.41 per week. Employees earning the National Minimum Wage will receive a total weekly increase of €10.41, inclusive of COLA.[/answer]

[question]Does every employee receive the €10.41 weekly increase?[/question]

[answer]The announced €10.41 increase concerns the National Minimum Wage and includes the €6.41 COLA. Employers should determine the adjustment applicable to each employee according to the employee’s wage, contract, applicable Wage Regulation Order and any collective agreement.[/answer]

[question]When will Malta’s minimum wage be reviewed again?[/question]

[answer]The Government intends to reconvene the Low Wage Commission during 2027 to work towards a new agreement concerning the National Minimum Wage from 2028 onwards.[/answer]

[question]How much will a new work-permit application cost in Malta?[/question]

[answer]The application fee for a new work permit for a worker from outside the European Union will increase from €600 to €800.[/answer]

[question]What is Malta’s new €400 infrastructure contribution?[/question]

[answer]It is an annual contribution applying to new applicants and persons renewing their permits. The announced contribution is €400 per person, while persons under 18 are excluded.[/answer]

[question]Does the infrastructure contribution apply to work-permit renewals?[/question]

[answer]Yes. The announced measure applies both to new applicants and to persons renewing their permits.[/answer]

[question]What is the combined announced cost for a new work-permit applicant?[/question]

[answer]The €800 new-application fee and the €400 infrastructure contribution indicate a combined cost of €1,200, before any other applicable fees. The payment arrangements should be confirmed once the implementation rules are available.[/answer]

[question]What new leave measures were announced in the Malta Budget 2027?[/question]

[answer]The announced measures include an additional 10 working days of leave per year for foster parents and 10 days of paid sports leave for qualifying elite athletes and accompanying technical and medical personnel.[/answer]

[question]What should employers review before the 2027 measures take effect?[/question]

[answer]Employers should review affected employees, payroll budgets, salary bands, wage differentials, work-permit requirements, leave policies, employment contracts and the combined effect of wage and recruitment costs.[/answer]

[question]How does Malta Budget 2027 encourage workforce productivity?[/question]

[answer]The Budget encourages greater investment in technology, digitalisation, automation, modernisation and workforce skills, rather than relying primarily on continued increases in employee numbers.[/answer]

[question]Are the Malta Budget 2027 employment measures already legally effective?[/question]

[answer]The measures were announced as part of the Malta Budget 2027. Certain measures may require legislation, regulations or administrative guidance before becoming fully operational.[/answer]