Budget 2026: Wages to increase by €4.66 a week
The cost-of-living adjustment for 2026 will be the lowest in four years
Wages will increase by €4.66 a week in 2026 as part of the cost-of-living adjustment (COLA) based on the previous year’s inflation.
The figure is the lowest adjustment in the past four years, down from €5.24 this year, and the record €12.81 in 2024. In 2023, COLA was €9.90 a week, but the rise was just €1.75 in 2021.
Last week, during a business breakfast organised by Times of Malta, Finance Minister Clyde Caruana had already announced the cost-of-living adjustment would be “less than €5 per week”.
COLA is awarded to all employees and is paid by employers as part of their workers’ salaries. It is worked out on a fixed formula based on the cost of a basket of products.
During his speech, Caruana predicted the Maltese economy would grow at a rate of 4.1% in real terms for 2025, with a more maintained pace in 2026. He said the increase in employment will stabilise and wages are expected to continue strengthening, while inflation is expected to stabilise close to 2.2%.
Over the past few years, the Nationalist Party, employers and social partners have criticised the decision to tax the payment.
Additional COLA payments to remain
During the speech, Caruana announced that the additional COLA payment, a measure introduced in the 2023 Budget, will continue to be handed out.
“Since we launched this mechanism at the end of 2022, an average of 85,000 families and single persons have been paid between them more than €100 million,” he said.
The payments are given to people who cannot cope with inflation simply based on the cost-of-living adjustment (COLA).
The amount of the grants ranges from €100 to a maximum of €1,500 over two payments, depending on the household wage and size of the family.
The benefit is usually paid in two tranches, with the first payment made in December and the second in the middle of next year.