Payroll updates 2026

During the Budget Speech for 2026, the Government also announced a new proposed incentive to support companies in relation to employee retention. Subject to specific conditions, this scheme is expected to offer incentives with respect to employees who have remained with the same employer for more than four years. Additional updates on this initiative are anticipated in due course.

As of 27 August 2025, Malta began implementing the Pay Transparency Directive, giving job applicants the possibility to request details about the initial salary or salary range for the role for which they are applying, as well as relevant pay terms arising from collective agreements, prior to commencing employment. In addition, during their employment, employees may request information relating to their individual pay level and the pay levels for categories of workers carrying out the same work. 

The Pay Transparency Directive is expected to be fully implemented and transposed by 7 June 2026, bringing with it new obligations regarding pay transparency. Upon transposition, employees will have the right to access both their own pay data and the average remuneration for comparable roles. Furthermore, large employers will be required to report on gender pay disparities and take corrective action if any unjustified gender pay gap exceeds 5%.

These developments provide an opportunity for employers to review and enhance their pay practices, ensuring compliance and promoting fairness, and taking proactive steps may help organisations prepare for the new requirements. 

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Following the implementation of the Labour Migration Policy, the Government has reaffirmed its commitment to stricter measures during the budget speech. In August 2025, Jobsplus introduced a monitoring system to track employee termination rates, aimed at preventing companies with high turnover from hiring under this scheme.

Additionally, in October 2025, termination rate thresholds were established for businesses of different sizes and will be gradually reduced every 3 months until July 2026.

With effect from January 2026, TCNs will be required to attend certain courses/ programmes and obtain certifications (including proficiency in English) before and after their relocation to Malta. Suitability checks are anticipated to be stricter, but employers may now have the option to renew TCN work permits for a period longer than one year, subject to the satisfaction of certain conditions.  

Other measures will continue to be rolled out over the next months, including the introduction of a public register of exemplary employers to reward compliance through faster approvals and longer permit durations. Training and guidance on application procedures and labour migration rules will continue throughout the implementation period.

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