Nicosia: Minister of Labour and Social Insurance Yiannis Panayiotou announced plans to adjust the minimum wage for 2026, with the decree expected by December’s end. He highlighted that the positive economic trajectory suggests benefits for the lowest-paid employees.
According to Cyprus News Agency, during his address to the House Committee on Financial and Budgetary Affairs, Panayiotou mentioned plans to submit pension reform bills to Parliament in 2025 and an action plan for salary adequacy to the European Commission by the first quarter of 2026. The Ministry’s 2026 budget is set at £951 million, an increase of £67 million from the previous year, excluding £29 million for projects co-financed by the European Social Fund. The total budget of £980 million is allocated with 21% for benefits and projects, 3% for personnel costs, and 75% for general government contributions, with operating costs kept at 1%.
The budget is projected to rise to £994 million in 2027 and £1,052 million in 2028. Panayiotou highlighted the Ministry’s achievement of full employment conditions, reaching an 80% employment goal set for 2030 by 2025. He noted that the country boasts one of the highest employment rates in the EU, with unemployment expected to fall to 4.6% in 2025.
Discussing the minimum wage adjustment, Panayiotou announced that social partners are invited to the first advisory committee meeting. The national decree for improving the minimum salary will be adjusted in two phases, effective in 2026 and again in 2028.
Addressing MPs’ concerns about potential wage increases beyond COLA (Cost of Living Allowance), the Minister clarified that COLA is not an increase but an additional benefit. The minimum salary adjustments will be based on specific criteria and reference points, with the COLA link offering a favorable outcome.
Regarding illegal employment, Panayiotou spoke about stricter penalties and enhanced inspections, noting potential for further improvements in this area.