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Maltese among least taxed and inexpensive workforce in EU

The study shows that only in Cyprus are employees less taxed than in Malta.

The study shows that only in Cyprus are employees less taxed than in Malta.

Maltese workers are still paying some of the lowest taxes in the EU, however, they are still almost among the lowest paid and the cheapest to hire, according to a new study.

Compiled by the Institut Economique Molinari based in Paris, the study shows that in 2015, Maltese workers paid a real tax rate of 29.44 per cent of their total earnings, when all taxes are deducted, including social security, income tax and VAT.

With an average real gross salary of €17,759, a typical Maltese employee ended up with an average real net salary of €12,530, according to the study.

Calculating the cost of an employer to hire a Maltese employee, the study shows that for every euro paid to a Maltese employee, the employer has to fork out an additional 33 cents in taxes.

On the other hand, in France, an employee costs an additional €1.20 in taxes for every euro paid.

Belgians are now the second most expensive employees to hire in the EU

The study shows that only in Cyprus are employees less taxed than in Malta. In all the other EU member states, including in these where employees are paid less than the average in Malta, workers end up paying more in taxes than their Maltese counterparts.

Until a few years ago, Belgians were overall the most taxed workers in the EU. However, following recent reforms by the Belgian government, France has surpassed its neighbour as the most tax burdened country.

Based on OECD figures, French workers last year paid 57.5 per cent of their earnings in taxes. However, they still ended up with more cash in their pockets than the Maltese as the average real net salary in France stood at almost €24,000 – twice Malta’s.

Belgians, according to the study, are now the second most expensive employees to hire in the EU, costing an employer an average gross salary of €59,482. However, they rank ninth in net income, with an average of €27,515.

Employers in Luxembourg must pay the most for their workers – €62,685 – but a worker also earns the most on average in the EU – €38,249.

On the other hand, the worst off workers are those in the former Communist countries.

The poorest workers by far are the Bulgarians, who last year ended up with an average of €3,700 in their pockets after paying 37.5 per cent of all their earnings in taxes.

Romanian workers only fare slightly better, ending 2015 with just €3,758, after deducting almost 48 per cent of their earnings in taxes.

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