Taxation is the system by which a government takes money from people and spends it on things such as education, health, social benefits and pensions among others.
Governments use taxation to encourage or discourage certain economic decisions.
- Consumption Tax — a tax on the money people spend, not the money people earn;
- Progressive Tax — a tax that is higher for taxpayers with higher income;
- Regressive Tax — as opposed to progressive one is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners.
Other types of taxes are the proportional, VAT or ad Valorem, property or Capital Gains tax and Inheritance tax.
An individual’s income is the best indication of the ability to pay and by how much. Income can be derived from either gainful employment or from pensions ( state or private) when one reaches retirement stage. There are also those who, through the promotion of active ageing, although pensioners, are still employed. Since year 2017, pensioners who are still employed are taxed as indicated further below.
- You can calculate your tax dues by downloading the relevant calculator.
- You can view your tax deductions by logging with your e-ID on cfr.gov.mt – My Income Tax Account
- In case of difficulties, you can phone 153 or email the Department of Inland Revenue Department (IRD) at email@example.com.
The below table depicts the tax payable by the working population (employees and working pensioners) whose status is single depending on their income bracket as per below.
The below table depicts the tax payable by the working population (employees and working pensioners) whose status is married depending on their income bracket as per below.
Parental Tax Rates 2019
The 2019 income tax rates applicable to full time pensioners (not working) whose status is single
The 2019 income tax rates applicable to full time pensioners (not working) whose status is married
Bonuses are issued in March, June, September and December and the full statutory bonuses are as follows:
- March €121.12
- June €135.10
- September €121.12
- December €135.10
For both pensioners and employees, the government bonus is added to the salary / pension paid by the employer / the State (in case of pensioners) and is taxable.
For employees, a net salary is the pay you actually receive, less Tax and National Insurance contributions. Your gross salary refers to your salary without any deductions.
Tax is paid as long as one remains in employment as per tables / status below. Pensioners in employment and employees pay National Insurance contributions till the age of 65 years.
The retirement and financial capability group has come up with user friendly calculators:
Tax-Calculator – Tax Status Married – For Married employees – Married pensioners – 2018
Tax-Calculator – Tax Status Married – For Married employees – Married pensioners – 2019
Tax-Calculator – Tax Status Single – For Single employees – Single pensioners – Single Computations more beneficial 2018
Tax-Calculator – Tax Status Single – For Single employees – Single pensioners – Single Computations more beneficial 2019
Choosing the relevant calculator allows you to calculate your tax dues, if any … Our user friendly guidebook will assist you to use our calculators effectively. The accuracy of your tax dues depends on the amounts you key in.
Our aim is to ensure that you understand your salary statements, calculate tax dues on your own, and have a clear picture of how adjustments to tax rates (yearly as per budget measures and budget incentives) affect you and your salary.
It is a fact that taxation lessen your monetary availability for both expenditure and saving. So it is crucially important to plan and prioritise your spending so that you would be able to save on a month to month basis! So, prioritise your spending!