New Personal Tax Rates for 2026 – What You Need to Know

Following the Budget 2026 measures, the Malta Tax and Customs Administration (“MTCA”) has issued updated personal income tax rates which apply from 1 January 2026 along with an updated version of the FS4 Payee Status Declaration Form (the ‘FS4 Form’) which has been amended to cater for the new income tax rates introduced.

These changes introduce new tax bands for families with one child and families with two or more children, potentially resulting in a lower tax burden for eligible individuals.

Below is a breakdown of the new Married and Parent tax rates, together with the eligibility criteria that must be met.

Married Rates – One child

Married Rates – Two or more children

To apply the new Married Rates with one child / two or more children, the following conditions must be satisfied:

• You and your spouse must be resident in Malta.
• At least one spouse must be either:
• A Maltese national or another EU/EEA national, or
• A long-term resident in Malta (subject to the conditions in the official guidelines)

You must maintain a dependent child under your custody who is:

• Under 18 years of age, or
• Under 23 years of age and in full-time education

Important note: Individuals who are unmarried, widowed, divorced, or separated (legally or factually), and who have sole custody of a dependent child, may continue to apply the current Married tax rates where these are more beneficial, subject to the conditions issued by MTCA.

Parent Rates – One child

Parent Rates – Two or more children

To apply the new Parent Rates with one child / two or more children, the following conditions must be satisfied:

• The individual must be resident in Malta.
• The individual must be either: a Maltese national or another EU/EEA national, or a long-term resident in Malta (subject to the conditions in the official guidelines)
• You must maintain a dependent child under your custody who is: under 18 years of age, or under 23 years of age and in full-time education
• Where the claimant is not the child’s biological or legal parent, eligibility for the new Parent rates applies only if the claimant is: legally married (including in a civil union) to the child’s parent, or in a legally registered cohabitation with the child’s parent under the Cohabitation Act

What do you need to do?

The current single, parent and married tax rates will continue to apply for individuals who do not fall within the scope of the new measures. Employers should ensure that payroll systems and employee records are updated accordingly to reflect the applicable rates.

Individuals applying for the new tax rates are required to complete the updated FS4 form and submit it to MTCA.

Need assistance?

If you would like support in confirming which tax rates apply to you (or your clients), or assistance in completing the FS4 form correctly, our team can guide you through the process.