The Cypriot government used its final cabinet meeting of the year to approve an 8.8 % rise in the national minimum wage, lifting it from €1,000 (gross, post-probation) to €1,088 per month with effect from 1 January 2026. Labour Minister Marinos Moushiouttas confirmed the decision in a late-evening press conference on 23 December, noting that the entry-level rate for the first six months of employment will move from €900 to €979. The change follows a six-month tripartite review that benchmarked earnings against Cyprus’s median salary and the EU directive on adequate minimum wages.
Background: Cyprus introduced a statutory minimum only in January 2024. Since then, record tourist receipts and double-digit vacancy rates in hospitality and construction have fuelled a tight labour market that relies heavily on third-country nationals and posted EU workers. The new figure brings the floor to roughly 58 % of the national median wage—short of the EU’s guidance to aim for 60 %, yet high enough, according to employers, to squeeze margins in sectors such as retail and food service that already struggle with seasonality.
Employer reaction: The Employers & Industrialists Federation (OEB) called the increase “disproportionate and economically unfounded,” warning on 24 December that companies unable to pass on higher wage costs could trim headcount or curb investment. OEB argues the hike will accelerate inflationary pressures just as Cyprus seeks to remain cost-competitive ahead of its EU Council presidency and a hoped-for Schengen accession push in 2026. Multinational firms with posted staff or regional service centres on the island will need to revisit salary grids and assignment budgets quickly; failure to comply can trigger fines of up to €5,000 per employee.
![Cyprus Raises National Minimum Wage to €1,088, Alters Cost Landscape for Global Employers]()
Union response: In a rare joint communiqué, the three main union confederations—SEK, PEO and DEOK—said the adjustment is “a step, but far from the stride required.” They estimate that 50,000 low-paid workers will benefit immediately but note that only €67 of the €188 increase is fresh money once automatic cost-of-living allowance (ATA) is stripped out. The unions want the wage floor taken to at least 60 % of the median—about €1,130—and pledged to press the issue during 2026 collective-bargaining rounds.
Practical implications:
• Global mobility managers should update cost-of-living indices, hardship allowances and shadow payroll calculations before 1 January.
• Work-permit renewals filed after the effective date must reference the new wage in employment contracts lodged with the Civil Registry & Migration Department.
• Posted-worker notifications under the EU Posted Workers Enforcement Directive must reflect the increase immediately.
• Companies operating in Freeport or IP-box regimes should scrutinise head-count planning, as higher wage bills could erode tax-efficiency gains.
Amid these administrative chores, companies and individual assignees can streamline visa, residence-permit and document-legalisation tasks through VisaHQ. The platform’s Cyprus portal (https://www.visahq.com/cyprus/) centralises requirements, offers digital tracking and provides expert support—helping organisations stay compliant when wage thresholds or employment terms change.
Looking ahead, the Ministry of Labour promised a fresh review in June 2026 that will consider productivity data and the impact of the EU Minimum Wage Directive’s transposition deadline. For now, Cyprus joins Portugal, Malta and Slovenia in the club of smaller EU economies offering a statutory floor above €1,000, a development that could both attract and deter mobile talent depending on sector and skill level.
Background: Cyprus introduced a statutory minimum only in January 2024. Since then, record tourist receipts and double-digit vacancy rates in hospitality and construction have fuelled a tight labour market that relies heavily on third-country nationals and posted EU workers. The new figure brings the floor to roughly 58 % of the national median wage—short of the EU’s guidance to aim for 60 %, yet high enough, according to employers, to squeeze margins in sectors such as retail and food service that already struggle with seasonality.
Employer reaction: The Employers & Industrialists Federation (OEB) called the increase “disproportionate and economically unfounded,” warning on 24 December that companies unable to pass on higher wage costs could trim headcount or curb investment. OEB argues the hike will accelerate inflationary pressures just as Cyprus seeks to remain cost-competitive ahead of its EU Council presidency and a hoped-for Schengen accession push in 2026. Multinational firms with posted staff or regional service centres on the island will need to revisit salary grids and assignment budgets quickly; failure to comply can trigger fines of up to €5,000 per employee.
Union response: In a rare joint communiqué, the three main union confederations—SEK, PEO and DEOK—said the adjustment is “a step, but far from the stride required.” They estimate that 50,000 low-paid workers will benefit immediately but note that only €67 of the €188 increase is fresh money once automatic cost-of-living allowance (ATA) is stripped out. The unions want the wage floor taken to at least 60 % of the median—about €1,130—and pledged to press the issue during 2026 collective-bargaining rounds.
Practical implications:
• Global mobility managers should update cost-of-living indices, hardship allowances and shadow payroll calculations before 1 January.
• Work-permit renewals filed after the effective date must reference the new wage in employment contracts lodged with the Civil Registry & Migration Department.
• Posted-worker notifications under the EU Posted Workers Enforcement Directive must reflect the increase immediately.
• Companies operating in Freeport or IP-box regimes should scrutinise head-count planning, as higher wage bills could erode tax-efficiency gains.
Amid these administrative chores, companies and individual assignees can streamline visa, residence-permit and document-legalisation tasks through VisaHQ. The platform’s Cyprus portal (https://www.visahq.com/cyprus/) centralises requirements, offers digital tracking and provides expert support—helping organisations stay compliant when wage thresholds or employment terms change.
Looking ahead, the Ministry of Labour promised a fresh review in June 2026 that will consider productivity data and the impact of the EU Minimum Wage Directive’s transposition deadline. For now, Cyprus joins Portugal, Malta and Slovenia in the club of smaller EU economies offering a statutory floor above €1,000, a development that could both attract and deter mobile talent depending on sector and skill level.
