Nicosia: The Cost of Living Allowance (CoLA) is set to experience a minor readjustment of 0.10% starting from January 1, 2026, covering the first six months of the year. This adjustment was confirmed in a circular released by the Ministry of Finance. Based on an agreement with social partners, a further readjustment of 0.12% will be effective from July 2026 for the subsequent twelve months.
According to Cyprus News Agency, the Ministry detailed that in 2025, the arithmetic mean of the underlying index used to calculate CoLA was 113.61 points, a slight increase from 113.46 points in the previous year, with 2015 as the base year. This reflects a 0.13% increase. The Statistical Service of the Republic of Cyprus reported that real GDP showed an annual growth rate of 3.5% during the first nine months of 2025. Economic indicators suggest continued positive growth in the fourth quarter, projecting an overall positive GDP growth for the year.
The Ministry of Finance stated that from January 1, 2026, CoLA will be adjusted from 360.98% to 361.44% on basic salaries for six months, with a minimum amount set at £13,803. From July 1, 2026, for a year, CoLA will further adjust to 361.53%, with the minimum amount reaching £13,807, consistent with the Permanent Agreement in Principle on CoLA.
The adjustments will factor into the remuneration calculations for officials and employees whose basic salaries exclude an integrated CoLA component. For those in public service whose basic salaries already incorporate a CoLA percentage of 27.99% along with general salary increases, the CoLA will increase from 12.56% to 12.67% on their new basic salaries from January 1, 2026, with a minimum allowance of £1,982. From July 1, 2026, this will rise to 12.70%, with a minimum amount of £1,987.