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Budget 2027 | Tax cut for parents enters second phase
Last year, government overhauled the income tax bands for parents and married couples with children. The changes were planned to be carried out across three years, with 2027 seeing the second part of tax cuts taking place
26 October 2026, 7:32pm
Matthew Farrugia
Matthew Farrugia
2 min read
Next year, Malta's income tax bands for parents and married couples with children will enter the second phase of their overhaul announced last year
Income tax bands for parents and married couples with children will continue to be widened in 2027, as this €160 million Budget 2026 measure enters its second phase.
Last year, government overhauled the income tax bands for parents and married couples with children. The changes were planned to be carried out across three years, with 2027 seeing the second part of tax cuts taking place.
The measure cost government €160 million over the three years.
Parent computation with one child
In 2027, parents with one child who earn between €24,501 and €60,000 will benefit from the highest increase in tax deductions from their group. When compared with their tax deductions this year, parents with one child will benefit from a 13.45% increase in deductions, meaning they will save €2,400.
Parents with one child who earn between €24,501 and €60,000 will see a 13.45% rise in their tax deductions, representing €4,850.
Those earning over €60,000 will benefit from a 5.65% rise in their tax deduction, meaning they will save €10,850.
Parent computation with two or more children
Next year, parents with two or more children earning between €24,001 and €33,500 will benefit from a €3,600 tax reduction. That represents a 29.73% rise in deductions from last year.
Those earning between €33,501 and €60,000 will save €6,950 in tax cuts, while parents with two or more children who earn €60,000 and more will save €12,950.
Married couple with one child computation
In 2027, the tax deductions for married couples with one child earning between €20,001 and €30,000 will be €3,000.
Married couples with one child earning between €30,001 and €60,000 will save €6,000 in tax cuts, while those earning more will save €12,000.
Married couple with two or more children computation
If a married couple has two or more children and earn between €30,001 and €41,000, they will save €4,500 in tax cuts, while those earning between €41,001 and €60,000 will save €8,600.
Married couples with two or more children earning more than €60,000 will benefit from a €14,600 tax cut.
Matthew Farrugia is a journalist at MaltaToday
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