The Cost of Living Allowance (CoLA) will be readjusted by 0.10% as of 1 January 2026 and for the first six months of the year, according to a circular issued by the Ministry of Finance.
Based on the agreement signed by the social partners, from July 2026 and for the following 12 months it will be readjusted by 0.12%.
As stated by the Ministry, in 2025 the arithmetic mean of the underlying Index used for calculating CoLA amounted to 113.61 points, compared to 113.46 points in the immediately preceding year (with 2015 as the base year), recording an increase of 0.13%. In addition, according to the latest available data from the Statistical Service of the Republic of Cyprus, real GDP during the first nine months of 2025 showed a positive annual growth rate of 3.5%. At the same time, based on available economic indicators, a positive growth rate is also expected for the fourth quarter of 2025, and therefore positive growth in real GDP for the whole of 2025 is expected.
Consequently, according to the Ministry of Finance, as from 1 January 2026 and for a six-month period, the CoLA is readjusted by 0.10% and increases from 360.98% to 361.44% on basic salaries, with a minimum amount of €13,803.
Furthermore, in line with the increases in the CoLA payout as provided for in the Permanent Agreement in Principle on CoLA signed by the social partners, as from 1 July 2026 and for a twelve-month period the CoLA will be readjusted by 0.12% and will stand at 361.53% on basic salaries, with a minimum amount of €13,807, the Ministry additionally notes.
It is noted that the CoLA will be taken into account for the purposes of calculating the remuneration of officials / employees / wage earners whose basic salaries do not include any integrated part of the CoLA.
For the salaries of officials and employees of the public service into whose basic salaries a CoLA percentage of 27.99% (down from 28.35% that applied during January–June 2018), as well as general salary increases of 6.656%, have been incorporated, the CoLA is increased as from 1 January 2026 and for a six-month period from 12.56% to 12.67% on the newly formed basic salaries, with a minimum allowance of €1,982.
As from 1 July 2026 and for a twelve-month period, the CoLA will stand at 12.70% on the new basic salaries, with a minimum amount of €1,987.
(Source: CNA)
