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Maltese salaries are below the EU average but taxes among the lowest

Maltese salaries are still lower than the EU average, according to new data published by Eurostat.

Maltese workers earning an average wage of €21,446 in 2010 paid €3,860 in taxes

However, Maltese workers pay among the lowest taxes in the EU on their earnings, making their purchasing power reach further than others who may be earning higher wages.

Based on earnings in the private sector in 2010, Malta’s average gross annual earnings stood at €21,446, about €5,000 less than the EU 27 average of €26,497.

The highest paid workers in the EU in 2010 were the Danes (€58,840), followed by the Luxembourgers (€49,316) and the Dutch (€45,215).

On the other end of the scale, Romanian (€5,891) and Bulgarian (€4,396) workers were by far the worst off.

In 2010, Malta’s tax rate on earnings from labour stood at just 18 per cent, the second lowest in the EU, only higher than Cyprus, where workers pay some 12 per cent of their earnings in taxes. Cyprus is on the verge of asking the EU for a bailout.

The situation in the rest of Europe is very different as the average tax rate in 2010 stood at 39 per cent, more than twice Malta’s average.

This makes a significant difference in the take-home pay of EU workers.

For example, while Maltese workers earning an average wage of €21,446 in 2010 paid €3,860 in taxes, an Italian worker, with an average wage of €28,230, had to fork out, €12,521 in taxes as the tax rate in Italy stood at 44 per cent.

This means that while an Italian average worker earns about €7,000 more than the average Maltese worker, he ends up with less take home pay. In some member states, labour taxes in the EU are very steep.

At 50 per cent, Belgium had the highest in the EU in 2010, followed by 46 per cent in France and 45 per cent in Germany, while the rate in Ireland was just 23 per cent and Luxembourg 28 per cent.

According to the EU’s statistics office, 20 out of the 27 EU member states had a statutory minimum wage in force at the beginning of 2012, with the highest being €1,801 a month in Luxembourg and the lowest being €138 a month paid to Bulgarian workers.

Malta’s minimum wage currently stands at €680 a month, the 10th highest in the EU.

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