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Payroll updates for 2015

Cost of Living Wage Adjustment (COLA) for the year 2015

The Cost of Living Wage Adjustment (COLA) for 2015 is € 0.58 per week.

Persons on the minimum wage who receive the COLA will be exempt from paying tax on the increase.

 

National Minimum Wage

 The National Minimum Wage related to a normal working week shall consequently be increased as follows, with effect from 1st January 2015.

  •  Aged 18 years and over - € 166.26 per week Aged 17 years - € 159.49 per week
  • Aged below 17 years - € 156.64 per week

 

Part-Time Employees

Part-time employees are to have their wages increased pro-rata by an hourly rate not below one fortieth of the applicable weekly rate shown above. Their National Minimum Wage shall likewise be pro-rated at an hourly rate not below one-fortieth of the applicable weekly rate shown below.

 

Income Tax Measures

 

Changes to the income tax brackets applicable to individuals

 

The highest personal income tax rate of 29% applicable to individuals who earn less than €60,000 will be further reduced to 25% under single, married and parent computations. Income over €60,000 will remain taxable at 35%. 

 

The tax free income ceiling applicable to those opting for a single tax computation will be increased to €9,150. Hence those who earn only the minimum wage will not be taxable even when taking into consideration the statutory bonuses. The married rates of tax shall also be applicable to those persons joined under a civil union.

 

Tax Rates for Basis Year 2015

 

Rates

Single Computation

Married Computation

Parent Computation

Tax Bands

Tax Bands

Tax Bands

0%

Up to €8,500

Up to €11,900

Up to €9,800

15%

€8,501 - €14,500

€11,901 - €21,200

€9,801 - €15,800

25%

€14,501 - €19,500

€21,201 - €28,700

€15,801 - €21,200

 25% 1

€19,500 - €60,000

€28,701 - €60,000

€21,201 - €60,000

35%

Over €60,000

Over €60,000

Over €60,000

1 Not applicable to dividend income which remains taxable at 35%.

 

Employment Measures

 

Maternity Leave

The additional four week period of maternity leave paid by the Government at €160 per week is being increased to €166.27 per week to reflect the increase in the minimum wage.

As from 1st January 2015, maternity leave to self-employed women will be paid by the Government at the minimum wage of €166.27 per week for a total of 14 weeks.

Maternity leave benefits shall be extended to those parents who adopt a child.

 

Employment of disabled persons

Maltese Law currently provides that companies employing more than 20 people must have in their employment at least 2% of its workforce made up of people with disability. Those companies not abiding by such rule will now have to compensate by paying an annual amount of €2,400 for every disabled person that should have been employed, up to a maximum of €10,000. For 2015 the employer will pay one third of the amount due, two-thirds in 2016 and the full amount in 2017.

Furthermore, those employing a person with disability will be exempt from paying the respective social security contributions and shall also be entitled to an income tax credit equivalent to the wage paid up to a maximum of 4,500 for every disabled person employed.

 

National Insurance Contributions

 

 With effect from 1st January 2015, the National Insurance Contributions have been revised as follows:

Rates of Class One Contributions (Employed Persons)

The following table has been issued by the Department for Social Security and includes the calculations for Social Security contributions for 2015 for all categories of employees. These rates have been adjusted to reflect the revised calculations as part of the pension reform.

Category
Type of Employed Persons;
Weekly Rate of Contribution Payable by Employed Person
Weekly Rate of Contribution Payable by the Employer
A
Persons under 18 years of age whose basic weekly wage or the weekly equivalent of their basic monthly salary does not exceed €166.26
€6.62€6.62
B
Persons over 18 years of age whose basic weekly wage or the weekly equivalent of their basic monthly salary does not exceed €166.26
€16.63, or if the insured person elects, 10% calculated to the nearest cent of such person’s basic weekly wage or the weekly equivalent of such person’s basic monthly salary (see note 1 below)
€16.63
C
Persons born on 31 December 1961 or before whose basic weekly wage or the weekly equivalent of their basic monthly salary exceeds €166.26 but does not exceed €343.11

Persons born on 1 January 1962 or after whose basic weekly wage or the weekly equivalent of their basic monthly salary exceeds €166.26 but does not exceed €418.25 (see note 2 below)
10% calculated to the nearest cent of their basic weekly wage or the weekly equivalent of their basic monthly salary
10% calculated to the nearest cent of their basic weekly wage or the weekly equivalent of their basic monthly salary
D
Persons born on 31 December 1961 or before whose basic weekly wage or the weekly equivalent of their basic monthly salary exceeds €343.11

Persons born on 1 January 1962 or after whose basic weekly wage or the weekly equivalent of their basic monthly salary exceeds €418.25 (see note 2 below)

€34.31


€41.83

€34.31


€41.83

E
Persons under eighteen years of age who are following a full-time course of studies orinstruction under the Student-Worker Scheme, or other similar schemes (including the Extended Skills Training Schemes, but excluding the Worker-Student Schemes) involving distinct work and study periods for which they are receiving remuneration
10% calculated to the nearest cent of the basic weekly remuneration or the weekly equivalent of their basic monthly remuneration up to a maximum rate of contribution of € 4.38
10% calculated to the nearest cent of the basic weekly remuneration or the weekly equivalent of their basic monthly remuneration up to a maximum rate of contribution of € 4.38
F
Persons over eighteen years of age who are following a full-time course of studies orinstruction under the Student-Worker Scheme, or other similar schemes (including the Extended Skills Training Schemes, but excluding the Worker-Student Schemes) involving distinct work and study periods for which they are receiving remuneration
10% calculated to the nearest cent of the basic weekly remuneration or the weekly equivalent of their basic monthly remuneration up to a maximum rate of contribution of € 7.94
10% calculated to the nearest cent of the basic weekly remuneration or the weekly equivalent of their basic monthly remuneration up to a maximum rate of contribution of € 7.94

 

 

NOTE 1: If the insured person elects to pay a contribution of 10% of a basic wage or salary less than the weekly equivalent of the National Minimum Wage, such contribution may, if the person qualifies for a contributory benefit or a contributory pension, result in the payment of a reduced contributory benefit or contributory pension.

 

NOTE 2: As a result of the pension reform enacted by virtue of Act XIX of 2006 and Legal Notice 336 of 2006, the increase in the highest contribution rate payable with effect from January 2014, is related to a guaranteed maximum pensionable income of €21,749 for persons born on or after 1st January 1962.

 

 

Rates of Class Two Contributions (Self Employed Persons)

 

 

Category

 

Type of Self  Employed Persons

 

Weekly Rate of Contributions payable by a self-employed person

 

Persons whose annual net earnings (excluding Maternity Benefit, Children’s Allowance and any ex-gratia Benefit payable under article 88 of this Act) during the calendar year immediately preceding the contribution year in which the contribution is being paid:

 

 

SP

Persons who exceed €1,005 but does not exceed €8,409 (this category applies only to single persons  who are not self-occupied)

 

€24.26

SA

is less than €9,869

 

€28.47

 

 

SB

Persons born on 31 December 1961 or before whose annual net income exceeds €9,869 but does not exceed €17,842

The weekly equivalent of 15% of their annual income calculated to the  nearest cent.

Persons born on 1 January 1962 or after whose annual net income exceeds €9,869 but does not exceed €21,749

 

 

SC

Persons born on 31 December 1961 or before whose annual net income exceeds €17,842

 

€51.48

Persons born on 1 January 1962 or after whose annual net income exceeds €21,749 (see NOTE 1 below)

€62.74

 NOTE 1: If the insured person elects to pay a contribution that is less than 28.47, such contribution may, if the person qualifies for a contributory benefit or a contributory pension, result in the payment of a reduced contributory benefit or contributory pension.

 

NOTE 2: As a result of the pension reform enacted by virtue of Act XIX of 2006 and Legal Notice 336 of 2006, the increase in the highest contribution rate payable with effect from January 2014, is related to a guaranteed maximum pensionable income of €21,749 for persons born on or after 1st January 1962.

 

National Insurance: Sickness, Injury, Unemployment & Special Unemployment Benefits

 

 The daily rates of benefit payable as from 1st January 2015:-

 

Daily Rate of Benefit (€)

Type of Benefit

A Single Parent or a Married Person maintaining a Spouse who is not employed on a full-time basis

Any other Person

Sickness Benefit

19.88

12.86

Injury Benefit

29.84

22.44

Unemployment Benefit

12.05

7.89

Special Unemployment Benefit

20.26

13.22