Malta Statutory Bonuses and COLA: A 2026 Guide for Employers

Statutory bonuses and COLA are fixed amounts that employers in Malta must pay on top of the basic wage, unless the agreed salary already includes them. In 2026 the statutory bonuses total €512.52 a year, and COLA adds €4.66 a week, or €242.32 over the year.

COLA stands for cost of living adjustment. It is a weekly wage increase that the government sets each year to reflect rising prices, and once awarded it becomes part of the employee’s wage. The statutory bonuses are separate lump sums paid at fixed points in the year, made up of two bonuses and two weekly allowances. The Department for Industrial and Employment Relations (DIER) publishes the amounts and payment dates.

Both apply to full-time and part-time employees. Companies hiring in Malta from abroad often miss them, because few other countries have anything similar. They also affect how a salary offer should be written, which is covered in the section on offers below.

For budgeting, a full-time employee who works the whole of 2026 is owed €512.52 in statutory bonuses, plus the COLA increase on the basic wage. Each year’s COLA stays in the wage once it is paid, so the increases build up over time. A salary agreed several years ago already carries the COLA awards made since then, and the next one is added to that higher figure.

COLA works as a compulsory annual pay increase, set at €4.66 a week for 2026. Over a full year that is €242.32. Part-time employees receive it pro-rata at €0.12 for each hour worked.

The government announces the COLA figure in the national Budget, which is normally presented in October or November, and the increase applies from the following January. The figure for 2027 is not yet known at the time of writing. Leave room for it in next year’s forecast, then update the number once Budget 2027 is published.

Because COLA is added to the basic wage, it can change Class 1 social security. For an employee born in 1962 or later who already pays the Category D maximum of €55.93 a week, COLA makes no difference to the contribution. For employees below the cap, it raises both the employee and the employer contribution by 10% of the increase.

Employers that pay well above the minimum often ask whether COLA can be absorbed into an existing salary. Many Maltese employers handle this by stating in the contract that the salary includes COLA. Where the contract is silent, the cautious approach is to treat COLA as owed in addition to the agreed pay and to take advice before doing otherwise.

Malta has two statutory bonuses of €135.10 each and two weekly allowances of €121.16 each, paid on four fixed dates through the year.

• End of March: weekly allowance of €121.16.
• End of June: statutory bonus of €135.10.
• End of September: weekly allowance of €121.16.
• Between 15 and 23 December: statutory bonus of €135.10.

The four payments add up to €512.52 in 2026 for a full-time employee employed for the whole year. They are flat sums, so they do not rise with salary: a senior engineer and a recent graduate receive exactly the same statutory bonus.

Payroll teams in Malta usually add each payment to the payslip for the month in which it falls due. On a monthly payroll, that makes the March, June, September and December payslips slightly higher than the others. New joiners from other countries often expect twelve identical payslips, so a short note in the welcome pack saves questions.

Employees who join or leave part-way through the year receive statutory bonuses pro-rata: €0.74 per calendar day of employment for the June and December bonuses, and €4.66 per week worked for the March and September weekly allowances.

Take an employee who has been employed for 60 calendar days of the period a statutory bonus covers. The pro-rated bonus is 60 × €0.74 = €44.40. If the same employee has worked 9 weeks of the period a weekly allowance covers, the pro-rated allowance is 9 × €4.66 = €41.94.

Leavers receive the pro-rated amounts due in their final pay, together with any unused annual leave and notice pay. Part-time employees receive the bonuses in proportion to their hours. Before running a final pay calculation, check the reference periods in the DIER guidance on bonuses and weekly allowances, since an error of a week or two is easy to make and awkward to correct once the employee has gone.

Statutory bonuses and COLA are taxable and subject to Class 1 social security, so they run through the Final Settlement System (FSS) like any other pay. The employer withholds tax and social security in the month of payment and reports them on the monthly FS5 return to the Malta Tax and Customs Administration (MTCA), due by the end of the following month.

At year end the amounts appear on each employee’s FS3 statement and on the employer’s FS7 reconciliation, both due by 15 February. No reduced rate applies to these payments, and the employee’s own tax computation determines how much is withheld.

Statutory bonuses also count when an employer claims from the Maternity Leave Trust Fund. For the 14 weeks of maternity leave the employer pays, it can reclaim the basic wage, pro-rata statutory bonuses at €9.85 a week, and its share of social security. Paid birth leave for the second parent is refunded on the same basis. Our guide to Malta payroll explains the full FSS cycle.

Every salary offer and contract in Malta should say whether the gross salary includes statutory bonuses and COLA. Many Maltese contracts state that the salary is “inclusive of statutory bonuses and COLA”, and that single phrase heads off most disagreements about what is owed.

Without it, an employee could argue that the €512.52 in bonuses and the COLA increase are due on top of the agreed figure. On a professional salary the sums are modest, but they lead to payroll corrections and difficult conversations early in the relationship.

The national minimum wage shows how the pieces fit together. In 2026 the adult minimum is €229.44 a week, which is €11,930.88 over 52 weeks. Adding the statutory bonuses brings the annual figure to €12,443.40, about €1,037 a month. Our Malta minimum wage 2026 guide lists the lower rates for 17-year-olds and under-17s.

Offers to candidates abroad benefit from a short explanation. Show the annual gross salary, the regular monthly pay and the months that carry an extra bonus or allowance, so the candidate compares like with like against offers from other countries.

An Employer of Record builds statutory bonuses and COLA into the Maltese payroll calendar, so the payments are made on time and the contracts describe them correctly. With Employer of Record Malta, our own Maltese company is the legal employer and issues contracts that state plainly what the salary includes.

We tell you in advance which months carry an extra payment, pro-rate the amounts for joiners and leavers, and process the tax and social security through FSS. When the Budget sets the next COLA figure, we confirm how it affects each employee and what it adds to your cost before the January payroll.

Our fee is a flat rate from €499 per employee per month, and contracts are usually ready within hours. The pricing page sets out what is included.

For teams with several employees in Malta, we list the bonus months for finance at the start of the year, so cash flow plans cover March, June, September and December. Part-time staff are handled the same way, with COLA paid at the hourly rate and bonuses pro-rated to their hours. If a contract you inherited is unclear about what the salary includes, we flag it before the next payment date so you can decide how to fix the wording.

Q01Are statutory bonuses mandatory in Malta?+

A.Yes. Employers must pay the two statutory bonuses and two weekly allowances, worth €512.52 a year in 2026 for a full-time employee, unless the contract states that the salary already includes them.

Q02How much is COLA in Malta in 2026?+

A.COLA is €4.66 a week in 2026, which is €242.32 a year. Part-time employees receive €0.12 per hour worked. The 2027 figure will be set in the next Budget.

Q03Can statutory bonuses and COLA be included in the salary?+

A.Yes. Many Maltese contracts state that gross salary is inclusive of statutory bonuses and COLA. The wording should be explicit, and the basic wage must still meet the national minimum wage.

Q04Do part-time employees get statutory bonuses and COLA?+

A.Yes, on a pro-rata basis. COLA is paid at €0.12 per hour worked, and the bonuses and weekly allowances are paid in proportion to hours.

Q05Are statutory bonuses taxed in Malta?+

A.Yes. They are taxable and subject to Class 1 social security, and they are processed through the FSS payroll and reported on the FS5, FS3 and FS7 forms.