Income tax on overtime is to be reduced to 15 per cent on the first 100 hours above regular hours for those earning up to €20,000 in basic income and are not in management positions, Finance Minister Edward Scicluna said in the Budget speech on Monday.

The proposal was first made by the Labour party while in opposition in 2008. 

In a pre-budget document published at the end of September, the Nationalist Party proposed that overtime and part-time work be taxed at 10 per cent.

The budget will also introduce a new one-off payment to families that covers price increases in basic items such as milk and bread.

Last July Benna raised the price of fresh milk for the first time in seven years. The recommended price for whole milk rose by 10c to a total of 96c. Last year the price of bread also rose by 24c on large loaves and 20c on small loaves.

The government will give a payout of €35 to families and €15 to single people. The measure does not affect the calculation of the cost of living allowance (COLA).

Cost of living increase

The allowance for the cost of living next year will be  €3.49 a week, up €1.16 from the previous year. Student’s stipends will also be raised pro rata.

Prof  Scicluna said the government wanted to ensure that workers were guaranteed equal basic pay for and equal value of work even in the private sector. He said this will be done in consultation with Unions and civil society groups.

Additionally, Prof Scicluna said, the government would no longer tolerate employers who did not observe the law when it comes to passing on social security contributions on behalf of their employees.

The government said it would be taking the necessary steps to see all employers regularizing themselves with the law with regards to NI contributions.

A number of other measures were rolled over from the previous fiscal year.

Extra day's holiday

For the third year in a row, employees will benefit from an additional day of leave to make up for public holidays that fall on weekends, now up to a total of 216 hours.

Tax refunds introduced last year will also be rolled over.  People earning up to €60,000 will receive between €40 and €68. The pledge will cost the government €11.5 million and will benefit over 200,00 people.

The reduction of stamp duty to 1.5 per cent on the transfer of family businesses will once again be renewed.

For the third year running €13 million will be set aside to compensate workers for past injustices, of which 8,000 people stand to benefit. The amount was increased by €1 million.


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