What to Expect in 2026
In 2026, Malta will introduce new tax rates for employees on Parent and Married tax rates.
Along with other annual changes, such as Minimum Wage and COLA, Buddy is preparing an update for the end-of-the-year.
Here is a summary of what to expect from this announcement:
- New Income Tax Rates for Parent and Married
- COLA and Minimum Wage
- Extra Payment in December Pay
- Important Communication on Upcoming Updates
New Income Tax Rates
In the Malta Budget 2026, it was announced four new tax rates for employees on Married and Parent tax rates, depending on the number of children.
Certain employees may not be eligible, depending on their length of contributions or residency in Malta. This will become clear once official guidelines are published.
The updated tax rates have already been implemented, and we encourage you to collect this information and update the tax rates before January 2026.
To check which of your employees are on Parent or Married Tax, go to the Reports page and download the Employee Data report.
In that report, filter for the Parent and Married tax rates and make sure to collect the information and update the tax rates on Buddy.
Any new tax rates saved effective as of 2025 will have no repercussions, as the 2025 calculations will continue to use the standard Parent and Married tax rates.
COLA and Minimum Wage
The COLA for 2026 is of €4.66 per week, whilst the minimum wage has increased by €7.66 per week.
We'll share more updates towards December, but you can prepare yourself on how you will be able to apply COLA here: Apply Cost Of Living Adjustment (COLA) and Minimum Wage
Extra December Payment
Similar to an announcement we shared in 2025, full-time employees may be working an extra day. This may be required to be paid, depending on certain circumstances.
We have updated the specific article on this to guide you on How to Add Extra Days in December Pay
Other Annual Changes
Alongside COLA and income tax changes, annual rates such as Social Security contributions and sickness/injury benefits will be updated in accordance with local guidelines.
Important Information on Upcoming Updates
We want to share important information about upcoming updates for Buddy, which we plan to launch towards the end of the year.
Leave Management Update
Buddy is already the most accurate software when it comes to calculating leave entitlement in Malta: (See: Vacation Leave Entitlement for Full-Time and Fixed-Hour Employees)
Our team will be re-engineering the leave management system to ensure that we can continue to provide accurate leave entitlements for an additional number of scenarios.
This will also come with additional features and flexibility.
This new system will be enforced starting with the 2026 payroll. For those working on the 2025 payroll, we will provide an opt-in choice for the current year.
More information will be shared in the coming weeks.
User Experience Update
The planned update will also include significant improvements to the user experience.
At large, the existing interface will retain the same layout as we make upgrades to the interface. You may notice small changes in fields such as Dates, which will have a new look and feel.
Buddy will also include new features, such as a search button within employee profiles, to efficiently move into other employee profiles without returning to the People page.
More Communication to Come
Our team is excited about this engineering direction and cannot wait until you get to experience these updates.
We'll be sharing additional information closer to launch.