News

New COVID Wage Supplement launched for 2021

Deloitte Malta Tax Alert

11 January 2021

As previously announced in the Malta 2021 Budget, the COVID Wage Supplement has been extended until 31 March 2021 and shall be calculated according to the drop in sales registered by the business on the basis of filed VAT declarations. To facilitate this new system, a data sharing agreement was reached between Malta Enterprise and the VAT Department wherein the latter shall provide all necessary data to Malta Enterprise in relation to the applicant’s VAT number.  

The COVID Wage Supplement shall be calculated in the following manner:

Percentage drop in sales
COVID Wage Supplement monthly rate (gross) – full timers
COVID Wage Supplement monthly rate (gross) – part timers

55% or greater

€800

€500

45% up to 54%

€640

€400

35% up to 44%

€480

€300

25% up to 34%

€320

€200

10% up to 24%

€160

€100

Increase in revenue or up to 9% drop in sales

€0

€0

For VAT exempt persons and newly-registered VAT numbers, the level of support shall be calculated according to the NACE code categorisation used for the current COVID Wage Supplement (annexes A, B and C). Furthermore, businesses which had to close down following the issuance of legal notices by the Superintendent of Public Health shall continue to receive the COVID Wage Supplement at the maximum rate.

In addition, the Government of Malta announced that the COVID Wage Supplement shall also cover new employees who have been engaged to replace employees who resigned voluntarily subject to the following conditions:

(a) The number of employees receiving the COVID Wage Supplement shall not increase beyond the number of employees receiving the said supplement as of 29 May 2020;

(b) The COVID Wage Supplement for such replaced employees shall be paid for periods covering October 2020 onwards;

(c) Applicants shall provide a written declaration signed by the legal representative of the applicant stating that the termination of the previous employee/s was on a voluntary basis; and

(d) The legal representative of the applicant shall declare that the employment conditions for the new employee are not less favourable than those of employees being replaced.  

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