The Cypriot government approved raising the monthly minimum wage for full-time employment from €1,000 to €1,088 after six months of continuous service. Labour Minister Marinos Mousiouttas announced the decision on Tuesday following a Cabinet meeting. The adjustment takes effect January 1, 2026, through December 31, 2027.
Mousiouttas stressed balancing social protection for workers with business viability to maintain competitiveness and job creation.
Economic factors guide decision
The increase accounts for 2024 inflation at 1.8%, 2025 forecast at 0.2%, totaling 2%. Economic growth projects 3.9% for 2024 and 3.4% for 2025, exceeding Eurozone averages. Unemployment fell to 4.9% in 2024, projected at 4.3% in 2025, nearing full employment.
Pre-six months wage rises from €900 to €979. The hike includes approximately 2% ATA adjustment, benefiting around 50,000 low-wage workers without inflationary pressures.
Technical committee consultations
A Technical Committee with employer, union, and ministry representatives convened multiple sessions. Employer proposals ranged from €1,036, unions up to €1,175. The government synthesized views considering macroeconomic data.
Mousiouttas held informal meetings and updates with stakeholders. No full Labour Advisory Council convened due to tight timeline, but dialogue continues on hourly wage and other reforms.
Focus on social cohesion
The policy prioritizes low-income workers against poverty risks, enhancing purchasing power while supporting entrepreneurship. Cyprus’s minimum wage now stands at around 57% of the median wage, above the EU average of 54%, but below the 60% EU directive cap.
Future discussions cover pension reforms, adequate wage directive, and foreign workers via regular committee and council meetings.
Also read: Tax reform approved – Non-taxable threshold to €22,000
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