in-cyprus 24 December 2025 - by Charalambos Zakos
The government yesterday set the minimum wage at €1,088 for 2026 and 2027, triggering immediate pushback from both unions and employers.
Labour Minister Marinos Moushouttas brought the proposal to Cabinet, which approved issuing a decree setting the minimum wage at €1,088, up from the current €1,000. The decision factored in 2024 inflation of 1.8% and a 2025 forecast of 0.2%, economic growth rates of 3.9% and 3.4% for the two years respectively, and unemployment falling to 4.9% in 2024 with a forecast of 4.3% for 2025 – a level corresponding to full employment.
The decree also raises the monthly minimum wage for workers with less than six months’ continuous employment from €900 to €979.
But the €1,088 figure falls short of the €1,125 unions had set as their minimum acceptable threshold, whilst employers branded the 8.8% increase “unprecedented” and economically reckless.
Reactions from trade unions
Unions reject the government’s framing that the minimum wage rises by €88, arguing the real increase is only €67 because the current minimum wage with cost-of-living allowance stands at about €1,021.
PEO General Secretary Sotiroula Charalambous told Fileleftheros the government “passed under the bar,” accusing it of “sweet-talking” employers in all recent decisions affecting workers. Unions plan to make decisions on their response within days, with a pan-union meeting scheduled before year-end. They’re leaving open the possibility of mobilisations.
DEOK told Fileleftheros the government’s approach is pro-employer, claiming the decision represents regression from 58.5% of the median wage to 57.5% – a total decrease, not an increase.
Unions also criticised the government for not convening the Labour Advisory Board, though this isn’t a legal requirement as the minimum wage decision, unlike cost-of-living allowance, is purely governmental. Social partners argued a consultative process would have been better than simple oral briefing.
Reactions from employers
The Employers and Industrialists Federation (OEB) hit back from the opposite direction, warning the 8.8% rise takes Cyprus’s minimum wage to 58% of the national median – significantly higher than the Netherlands (48%), Germany (51%) and Luxembourg (54%). “Obviously some believe the Cypriot economy is stronger than the largest EU economies,” OEB said.
OEB warned the increase will drag up a broad range of wages with dual consequences: businesses unable to pass costs to customers will face viability issues, whilst those that do will trigger inflationary pressures damaging real incomes and competitiveness. The federation said it will closely monitor the macroeconomic effects of this “unprecedented” decision.
Procedure followed
The minister followed the institutionalised procedure: social partners submitted proposals to the National Minimum Wage Review Committee, whose president Andreas Charitou compiled a report forwarded to Moushouttas. The minister studied the positions and brought his proposals to Cabinet, the competent body to issue the decree.
The decision contrasts sharply with recent statements by former Labour Minister Yiannis Panayiotou, who told Fileleftheros the revised minimum wage effective January 2026 would reach at least €1,125, causing reactions at the time.
Another flashpoint remains unresolved: hourly rate calculation. Panayiotou had noted the government’s intention since December 2023 to regulate the hourly rate calculation method via the December 2025 decree. But the Cabinet made no decision on this, leaving hourly rates without regulation for the next two years.
