Malta’s minimum wage increase still the lowest in EU

Malta had the fourth lowest minimum wage increase this year, a Europe-wide review released yesterday shows.

The monthly minimum wage stood at €762 in January, a nominal increase of 1.9% over the same month last year.

The annual review published by Eurofound, a foundation focussed on living and working conditions, showed that the increase in Malta was the fourth lowest across the 22 EU countries that have a statutory minimum wage.

When taking into account annual inflation, the real increase in the minimum wage was 0.9%.

However, Maltese workers on minimum wage pay among the lowest taxes on their income. In Malta, no income tax is paid on minimum wage earnings and the social security contribution amounts to 10%.

This means that minimum wage earners in Malta pay the sixth lowest tax rate among the 22 surveyed countries.

In Belgium, minimum wage earners pay a paltry 4.25% in taxes and social security contributions, while Lithuanian workers on the minimum wage have 39.5% shaved off in taxes.

Malta is considered to have a medium minimum wage rate alongside Portugal, Spain, Greece and Slovenia. All these countries saw minimum wage increases, with the lowest being in Malta and the highest in Spain at a significant 22%.

Countries with the highest minimum wage rates tended to have more modest increases, ranging from around 2% in France, Belgium, Netherlands and Ireland, to 3.6% in Luxembourg and 4% in Germany.

The minimum wage in Malta, like all other wages, increases annually with the Cost Of Living Adjustment (COLA). An agreement between the government, employers and union reached in 2017 included a top up to the minimum wage for 2018 and 2019. It also introduced the concept that nobody should stay on the minimum wage for more than a year, stipulating the rate of increase.

According to Eurofound, only 2.3% of workers in Malta earned the minimum wage, one of the lowest rates across the EU.