Non-EU Workers earn 38% less than national average

Malta’s labour market is characterised by a stark nationality gap in wages, with third-country nationals (TCNs) earning significantly less than their Maltese and European counterparts.

The information comes from a detailed analysis of Malta’s labour market by the Central Bank.

According to a new discussion paper by Aaron Grech, Chief Officer of the Economics Division at the Central Bank of Malta, the median employment income for third-country nationals who worked a full year in 2024 stood at just €18,200. This figure is approximately 38% lower than the national average.

The report, titled The Impact Of Labour Turnover On Malta’s Wage Distribution suggests that while foreign workers have driven much of Malta’s recent employment growth, their compensation remains largely tied to basic wages, lacking the bonuses and allowances frequently enjoyed by local workers.

Parity between Maltese and EU nationals

While TCNs lag behind, the study finds a surprising level of parity between Maltese and EU/EEA citizens. When the data is restricted to those who completed a full year of employment, the median income for Maltese nationals is €32,500, while EU/EEA nationals earn a nearly identical €32,700.

This 1% difference suggests that EU workers—many of whom are concentrated in high-paying sectors like gaming, or hold managerial and professional roles—have reached earning equilibrium with the Maltese workforce.

This contradicts earlier perceptions that foreign workers across the board were depressing median wage levels for the entire economy.

Correcting the “low wage” narrative

The primary objective of Grech’s report is to correct recent media reports that suggested a much bleaker reality. This is because raw administrative tax data presented in parliament suggested that one in four full-time workers in Malta earned less than €12,000 annually.

However, the Central Bank analysis proves these claims were based on a fundamental misunderstanding of the data—it failed to account for labour turnover.

Because Malta has a highly dynamic workforce, many people appear in tax records as having “low annual income” simply because they only worked in the country for a few months of the year.

“The inclusion of so many taxpayers with just a few months of employment income depressed greatly the average and median wage,” Grech notes. When the dataset is cleaned to include only those with a full year of social security contributions, the statistics shift dramatically.

The prevalence of workers earning under €12,000 drops from 25% to less than 6%

The actual median employment income is €29,137, which is 28% higher than unadjusted figures suggested.

The average wage for a full-year worker is €35,640, a quarter higher than the estimates widely quoted in the press.

The turnover distortion

The report identifies high turnover as the “critical factor” distorting public perception. In 2024, only 62% of all full-time taxpayers actually worked a full 12 months. This volatility is most extreme among foreign labour, where less than half (46% of TCNs and 48% of EU nationals) remained in their jobs for the entire year.

By including these “part-year” workers in annual averages, previous reports gave a “completely wrong impression of the local economy’s wage structure”.

Rising inequality

Despite the upward revision of average wages, Grech confirms that wage inequality has risen since 2012. The Palma Ratio—which compares the top 10% of earners to the bottom 40%—increased from 2.1 to 2.4 over the last decade.

However, the report argues this increase is mostly driven by social changes.

These include record numbers of women, older workers, and former social benefit recipients having joined the workforce.

While these groups often enter at lower wage brackets, increasing statistical inequality, their participation reduces overall household poverty and boosts future pension entitlements.