Malta Budget 2027 has brought a number of changes that could affect how much people earn, spend and save in the coming year. From a higher cost-of-living adjustment (COLA) to changes in work permit fees, pensions and tourism charges, the latest announcements will have implications for employees, families and businesses across the country.

Finance Minister Clyde Caruana presented Budget 2027 on Monday 26th October, outlining measures aimed at supporting households while addressing some of Malta’s longer-term economic challenges. While certain initiatives are designed to put more money into people’s pockets, others introduce additional costs or change access to existing benefits.

For workers, the €6.41 weekly COLA increase is among the most immediate announcements. However, changes affecting third-country nationals, employers and small businesses could also influence Malta’s employment landscape throughout 2027.

So, what exactly is changing, and how could these measures affect your working life? Here’s a breakdown of the key Malta Budget 2027 announcements.

COLA Increases To €6.41 Per Week

The cost-of-living adjustment (COLA) for 2027 has been set at €6.41 per week, marking an increase from the €4.66 awarded in 2026. It is also higher than the €5.24 weekly adjustment announced for 2025.

For a full-time employee, the new COLA amounts to approximately €333.32 annually before tax. The adjustment will be included in employees’ wages, while pensions and social benefits will also receive the increase. Student stipends will rise proportionately.

COLA is calculated using an established formula based on changes in the Retail Price Index. Although the amount is announced during the Budget, it is determined by inflation rather than being selected directly by the government.

For employees, the increase provides additional income to help offset everyday expenses. However, its impact will depend on individual household costs and how prices change throughout the year.

Tourist Eco-Contribution Rises From €1.50 To €8 Per Night

One of the biggest changes announced in Malta Budget 2027 concerns the environmental contribution paid by tourists staying in Malta.

From 2027, visitors staying in hotels and other applicable licensed accommodation will pay €8 per night, compared with the current €1.50. The contribution will be capped at €64 per person per stay.

Tourists staying in short-let accommodation, including Airbnb-style rentals, will face a higher charge of €10 per night, capped at €80 per person per stay.

The contribution applies to visitors aged 18 and over. The government expects the revised tourism measures to generate approximately €182 million annually, with the revenue intended for tourism-related spending.

For businesses operating in hospitality and accommodation, the changes could influence pricing, booking decisions and the overall cost of visiting Malta.

Tourists Visiting Comino To Pay €5

Budget 2027 also introduces a new €5 contribution for tourists visiting Comino, one of Malta’s most popular destinations.

The charge forms part of the government’s wider effort to increase tourism’s contribution towards the infrastructure and services used by visitors.

Comino attracts large numbers of tourists, particularly during the summer months, making visitor management an ongoing concern.

The new contribution is intended to generate additional revenue while supporting a more sustainable approach to tourism.

For tourism operators organising excursions to Comino, the charge may need to be reflected in package prices and communicated clearly to visitors.

Cruise Passengers To Pay €10 Contribution

Cruise passengers stopping in Malta will face a new €10 contribution under the Budget 2027 measures.

The charge will apply to passengers visiting Malta as part of a cruise stopover. However, cruises departing from Malta will be exempt.

The measure forms part of a broader package intended to ensure that tourism contributes more towards the public infrastructure and services it uses.

For businesses that depend on cruise tourism, the introduction of the contribution could influence visitor spending and the pricing of organised excursions.

Gozo Ferry Fares Increase For Tourists

Tourists travelling to Gozo will face higher ferry fares from 2027, following changes announced in the Budget.

The adult tourist fare on Gozo Channel will increase from €4.65 to €11, while the fare for children will rise from €1.50 to €7. The charge for a car driven by a tourist will increase from €15.70 to €22.

Tourists using the fast ferry service between Valletta and Mġarr will also pay an additional €3 surcharge per crossing.

Importantly, ferry fares for residents will remain unchanged.

The increases are intended to make tourism contribute more towards the transport infrastructure it uses. However, they could also affect travel decisions, particularly among families and visitors planning shorter trips to Gozo.

Businesses operating in Gozo’s tourism sector will be watching closely to see how the changes influence visitor numbers and spending.

Free Public Transport To Be Restricted For Some Third-Country Nationals

Budget 2027 introduces changes to eligibility for free public transport in Malta.

From next year, the benefit will be limited to Maltese citizens, EU nationals and qualifying long-term residents.

This means that third-country nationals who do not meet the relevant residence requirements will no longer qualify for free public transport under the revised arrangements.

Free public transport was introduced for residents holding a Tallinja card in October 2022. The new restrictions represent a significant change to how the benefit is provided.

For affected workers, losing access to free public transport could increase monthly commuting expenses, particularly for those who rely on buses to travel to and from work.

The changes may also influence how international workers assess the overall cost of living and working in Malta.

Free Childcare To Be Restricted For Some Third-Country Nationals

The government has also announced changes to eligibility for Malta’s free childcare scheme.

From 2027, access will be limited to Maltese citizens, EU nationals and qualifying long-term residents, meaning that some third-country nationals will no longer benefit from the scheme.

Free childcare has been available to eligible working parents since 2014, helping families manage childcare responsibilities alongside employment.

For parents affected by the changes, paying for childcare could introduce a substantial additional household expense.

The measure may also influence employment decisions, particularly in families where both parents work or where childcare costs represent a significant proportion of monthly income.

Employers recruiting international workers may need to consider how these changes affect the attractiveness of employment opportunities in Malta.

Work Permit Application Fees For Non-EU Workers Increase To €800

The government is increasing the cost associated with employing workers from outside the European Union.

Under Budget 2027, the application fee for a work permit will rise from €600 to €800.

In addition, a new €400 infrastructure contribution will be charged whenever a work permit is renewed.

This infrastructure contribution is a separate measure associated with permit renewals, rather than simply an increase to the existing application fee.

For businesses that regularly recruit third-country nationals, the changes will increase the cost of international recruitment and workforce retention.

Employers in sectors that depend heavily on foreign workers may need to review their recruitment budgets and longer-term staffing plans.

Third-Country Driving Licences To Be Recognised For 12 Months

Another measure announced in Budget 2027 concerns the recognition of driving licences issued outside Malta.

Under the changes, driving licences issued by third countries will be recognised for 12 months from entry into Malta.

For residence permit holders, the recognition period will run for 12 months from the date their residence permit is issued.

The measure could provide greater flexibility for newly arrived workers who need time to complete the necessary administrative arrangements after relocating.

It may be particularly relevant to employees whose jobs involve driving, as well as foreign residents who depend on a car for their daily commute.

Pensions Increase By €10 Per Week

Pensioners in Malta will receive an additional €10 per week in 2027, continuing the government’s planned increases to retirement income.

The adjustment follows a €10 weekly increase in 2026 and forms part of a wider commitment to improve pensions over the current legislature.

The Budget also confirms the final stage of a phased change allowing eligible widows and widowers to receive a full pension.

For retired individuals, these measures are intended to provide additional financial support and strengthen pension entitlements.

The changes also highlight the importance of understanding how employment history and social security contributions affect retirement income.

Spouses To Be Allowed To Transfer Surplus Social Security Contributions

A significant pension-related announcement will allow surplus social security contributions to be transferred between spouses.

The initiative is designed to help individuals who have gaps in their contribution records, particularly those who stopped working to raise children or care for family members.

For example, one spouse may have contributed for more years than required for their pension entitlement. Under the announced measure, qualifying surplus contributions could be transferred to the other spouse.

This could help individuals who spent extended periods outside paid employment improve their pension entitlements.

The change may be especially relevant to families where one partner took a lengthy career break while the other remained in full-time employment.

Corporate Tax Reduced To 25% For Eligible Small Businesses

Budget 2027 introduces a targeted corporate tax reduction for smaller businesses in Malta.

Companies with an annual turnover below €1 million will be eligible for a 25% corporate tax rate on profits retained within the business, compared with the existing headline rate of 35%.

The reduced rate will apply to retained profits rather than profits distributed as dividends, which will continue to be subject to the existing tax treatment.

The measure is intended to encourage businesses to reinvest earnings into their operations, whether through purchasing equipment, expanding services or creating additional employment opportunities.

For example, a qualifying business retaining €50,000 in taxable profits would face a tax calculation of €12,500 at 25%, compared with €17,500 at 35%, before considering other applicable tax provisions.

For small business owners, the change could provide greater flexibility when planning future investments and business growth.

It may also create opportunities for businesses to strengthen their operations and potentially expand their workforce.

What Does Malta Budget 2027 Mean For Employees And Businesses?

Malta Budget 2027 introduces a mixture of financial support, tax incentives and additional costs that will affect different groups in different ways.

For employees, the €6.41 weekly COLA increase is one of the most immediate changes. Pensioners will also benefit from higher payments, while new rules on social security contributions could improve retirement entitlements for some families.

However, not every measure will reduce expenses. Changes affecting third-country nationals, higher work permit costs and new tourism charges could create additional financial pressures for certain workers and businesses.

For employers, the Budget introduces changes that may influence recruitment costs, workforce planning and investment decisions. Meanwhile, the targeted corporate tax reduction could provide eligible small businesses with more opportunities to reinvest and grow.

Ultimately, the impact of Budget 2027 will depend on individual circumstances, employment status and the measures that apply to each household or business.

As Malta moves towards 2027, staying informed about these developments will be essential for anyone planning their finances or considering their next career move.

At Keepmeposted, we’ll continue covering the changes that matter most to Malta’s workforce, helping employees and jobseekers stay informed about salaries, employment opportunities and developments in the local job market.

Thinking about your next career move in 2027? Whether you’re looking for a higher salary, exploring a different industry or simply keeping an eye on new opportunities, now is a good time to consider your options.

Visit keepmeposted.com.mt to browse the latest jobs in Malta and take the next step in your career.