Cost of Living Adjustment
Each year, during Malta's Budget speech, the government announces a minimum increase in salary. This is referred to as COLA (Cost of Living Adjustment), and the increase is to be paid by the employer to every employee, effective 1st of January.
From 2024, the Budget also included an increase to the Minimum Wage. Buddy has updated its process to include minimum wage checks in its COLA Review process.
Reviewing Cost of Living Adjustment on Buddy
Once a new year rolls, Buddy checks if the employee has a new salary starting on the 1st of January. When no changes are detected, you will see an orange banner at the top of the people page, asking you to apply the Cost of Living Adjustment.
The Review Process
Once you click Review, Buddy will show you a table of employees (up to 100 employees at a time), along with their current salary, the new salary, and the salary increase.
Salary Increase
The salary increase will reflect the following:
- The proportion of COLA, based on the employee's settings and weekly hours
- If adding the standard COLA to the previous salary results in less than the expected minimum wage, the increase will top-up to match the minimum wage
Minimum Wage (2024)
The minimum wage for 18 years olds in 2024 is of €213.54 per week.
Although the minimum wage may vary per industry based on Wage Regulation Orders (WROs), Buddy's minimum-wage check, at the moment, only uses the standard minimum wage.
Changes on the 10th of January
Until the 10th of January, Buddy's minimum wage included an additional supplement to those having completed 1 or 2 years of service with the same employer. This is reflected in the below screenshot.
However, on the 10th of January, the DIER updated its directions online, specifying that this supplement is no longer in force. Therefore, Buddy has released an update to no longer include this supplement.
COLA Explained
Not sure how the entitlement is being calculated? Hover over the Salary Increase of any employee to see the explanation.
New Salary
Buddy will automatically suggest the New Salary based on the previous rates and the abovementioned increase.
If an employee is receiving a salary increase that is larger than the required COLA amount, users can manually edit it the amount before applying the COLA.
Buddy will not allow the COLA to be submitted if there is any employee who is receiving less than the legal amount.
Round Up
COLA is often announced as a rate per week, which, when calculating to pro-rata, leads to further fractions and decimals.
On the top left, you can tick "Round up to 2 Decimal Places". This will always round upwards, favourable for the employee.
Apply from Start of 1st Period
For those whose first payroll starts prior to 1st January, you can also enable the COLA to be applicable from the first day of the period.
For instance, if your payroll runs from 28th December to 28th January, to prevent having multiple rates, this option will enable the COLA as of 28th December. The date can never start after the 1st of January for legal reasons.
COLA was already applied on Salaries Provided
This option will only appear to those who are opening a new account with Buddy and do not have any payroll data for the previous year. If you have inserted the employee data as of the current year, then you can enable this option to skip the review.
Apply Cost of Living
Once you have reviewed all the employee salaries, click the Apply Cost of Living button, and you're done! All salaries have been updated.