Maltese Workers Pay Europe's Second-Lowest Taxes

1st August 2016

Maltese workers pay the second-lowest amount of taxes in Europe, according to a study released by the Molinari Economic Institute this week.

Maltese workers pay the second-lowest amount of taxes in Europe, according to a study released by the Molinari Economic Institute this week.

Titled ‘The Tax Burden of Typical Workers in the EU 28’, the study, which used OECD tax data and national salary statistics to reach its conclusions, with payroll tax calculations provided by EY, showed that the real tax rate on an average Maltese salary stands at 29.44 per cent. 

Taking the average Maltese gross salary of €17,759 a year, the study deducts social security payments and income tax, leaving a take-home pay of €13,309. After deducting an estimated €779 in VAT payments over the year, the average worker is left with €12,530 as a real net salary and an overall real tax rate of 29.44 per cent. The EU average tax burden on individual workers is now 44.96 per cent, according to the report.

Furthermore, Malta’s Tax Freedom Day – the day when people stop working to fund their tax bill and start working for themselves – is the EU’s second-earliest and falls on 18 April. Cyprus’ Tax Freedom Day falls on 29 March.

On the other end of the tax spectrum lies France, whose tax burden on the average employee is 57.33 per cent. This means that they effectively will have worked until 29 July (210 days) this year to pay their tax obligations.

The report’s authors observed that countries with high tax burdens do not always deliver the best public services, adding that this seemed to be the case in France and Belgium.


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