COLA | All about Cost of Living Allowance in Malta

The amount of COLA is set at €12.81 per week for full time employees and €0.32 per hour for part time employees in 2025 and is not taxable. It is basically a government bonus which is automatically added to the salaries. The primary goal of this bonus is to help low earners maintain a good standard of living.

Who is Eligible for COLA

All employees whether full time or part time from both the public and private sectors. Moreover, People who are retired and are receiving government pensions, any kind of social benefit. In some cases, trainees may also be eligible for COLA.

When is COLA paid

From the 1st of January of every year, the revised amount of COLA is to be added to every employee's salary by their employers. The COLA adjustment is announced during the annual government budget, usually in October, and becomes effective at the start of the following year. Employers are required to include the updated COLA in salaries and wages, as it is a mandatory increment to compensate for inflation.

How COLA is Calculated

Cost of Living Allowance (COLA) is calculated through Retail Price Index (RPI). Retail Price Index is an indicator that helps measure inflation. RPI identifies the monthly change in prices of goods and services purchased by private households.

To calculate COLA for the current year, multiply the last year's COLA with the decimal value of RPI. Then add the last year's COLA to the result of this multiplication, the value you get will be the COLA for the current year.

For Example

• We are calculating COLA for 2030.
• Retail Price Index (RPI) increase value is 30%.
• Previous year COLA value is €9.90.

RPI is given in percentages, first of all, you need to convert it to a decimal value which is equal to 0.30 in this case.

€9.90 * 0.30 = €2.97

This €2.97 is the increase in COLA because of RPI.

To find out the COLA for 2030, we need to add this value to the previous year's COLA.

€9.90 + €2.97 = €12.87

The COLA for 2030 will be €12.87.