Cyprus Minimum Wage 2026: Current Rates, Who It Applies To and What Employers Should Do

Cyprus updated the national minimum wage from 1 January 2026. The system has two monthly levels: one for new hires and a higher rate once an employee completes six months of continuous employment with the same employer. Employers should make sure payroll applies the change correctly – especially when the 6-month increase becomes due and when calculating pro-rata pay for part-time staff.

This guide explains the minimum wage in Cyprus for 2026 in clear terms, plus how it connects (at a high level) with the new 2026 personal income tax brackets introduced under the Cyprus tax reform.

Minimum Wage in Cyprus 2026: Current Monthly Rates (€979 / €1,088)

From 1 January 2026, the national minimum wage in Cyprus is:

• €979 gross per month — on recruitment (during the first 6 months with the same employer)
• €1,088 gross per month — after completing 6 months of continuous employment with the same employer

 

How the 6-month increase works in practice

The higher rate is triggered once the employee completes six months of continuous employment with the same employer. This is not a general “experience-based” rule—it is linked to time in service with that employer. Practically, that means payroll should have a clear trigger so the change happens automatically at the right time.

Minimum wage Cyprus 2026 vs 2025: what changed

The 2026 update increased both the entry rate and the post-six-month rate (from €900 → €979 and from €1,000 → €1,088, respectively). The new rates were introduced by decree published at the end of 2025 and applied from the start of 2026.

Who is covered by the minimum wage in Cyprus?

Cyprus’ national minimum wage regime is designed to cover most employees, but not every employment category is treated the same, and some activities may be governed by separate wage frameworks or sector-specific rules rather than the general national minimum wage.

Note: if your business operates in a sector with distinct employment practices (or you rely on sector-specific decrees/arrangements), confirm which framework applies before updating employment documents and payroll settings.

Minimum Wage for Part-Time Employees: Pro-Rata Rules

The published minimum wage amounts (€979 / €1,088) are monthly gross rates for full-time employment. For part-time employees, the minimum wage should be applied pro-rata, based on working time compared to the full-time schedule in that economic activity.

This matters especially where:

• contracted hours are reduced or increased mid-month
• staff move between part-time and full-time
• flexible schedules are used (common in labour-intensive operations)

 

If payroll doesn’t consistently pro-rate based on contracted hours, underpayments can happen unintentionally.

Minimum Wage in Cyprus 2026: Gross vs Net Pay (What Employees Actually Receive)

The Cyprus minimum wage is expressed in gross monthly salary. Net take-home pay will be lower and depends on the employee’s profile and statutory deductions (for example, payroll contributions and – where relevant – income tax).

For many minimum-wage earners, the main drivers of the difference between gross and net are typically payroll deductions rather than personal income tax – especially now that the 2026 tax reform increased the tax-free threshold.

Personal Income Tax 2026: New Tax Brackets and How They Relate to Minimum Wage

Cyprus’ tax reform introduced a higher tax-free threshold and revised progressive brackets effective from tax year 2026.

Cyprus income tax brackets 2026 (table)

Chargeable annual income (EUR)	Marginal rate
0 – 22,000	0%
22,001 – 32,000	20%
32,001 – 42,000	25%
42,001 – 72,000	30%
Over 72,000	35%

Do minimum wage earners pay income tax in Cyprus in 2026?

A full year at the 2026 minimum wage typically sits below the €22,000 tax-free threshold:

• €979 × 12 = €11,748/year
• €1,088 × 12 = €13,056/year

 

So in many standard cases, personal income tax is nil, and take-home pay is mainly affected by payroll deductions and individual circumstances.

Read more about Cyprus Tax Reform 2026: What Changed From 1 January

Minimum Wage Compliance: Employer Checklist

Update contracts and salary documentation

Where needed, ensure documents clearly reflect:

• gross monthly salary
• working time (full-time/part-time)
• the mechanics and timing of the 6-month increase

 

Set a payroll trigger for the 6-month increase

A common operational risk is simply missing the month when the employee crosses six months and should move from €979 to €1,088. Build an automated check (or a recurring control) so it cannot be overlooked.

Budgeting for the minimum wage increase in Cyprus

Minimum wage updates affect total employment cost and can influence pricing, shift planning, and hiring – especially for businesses with high labour intensity.

Keep payroll records audit-ready

Minimum wage compliance issues often become expensive not because the rule is complex, but because records don’t match what was agreed (or what was actually paid). Clean documentation and consistent payroll outputs reduce risk and simplify any future checks.

Read more about Cyprus Payroll Tax Updates 2025+ (TD7 / IR7 monthly PAYE)

IBCCS TAX Support: Payroll and Employment Compliance in Cyprus

If you employ staff in Cyprus (or you are setting up a Cyprus company and hiring locally), we can support you with:

• payroll setup and ongoing payroll compliance
• employment structuring (full-time/part-time, salary documentation, controls)
• practical guidance on how minimum wage rules and the 2026 tax environment affect your day-to-day payroll process

 

Learn more about our Payroll Preparation Services in Cyprus

FAQ: Minimum Wage Cyprus 2026

1) What is the minimum wage in Cyprus in 2026?
€979 gross/month on recruitment (first 6 months) and €1,088 gross/month after 6 months of continuous employment with the same employer (full-time basis).

2) When did the Cyprus minimum wage change take effect?
The revised rates apply from 1 January 2026.

3) Is the Cyprus minimum wage gross or net?
It is set as a gross monthly wage. Net pay depends on statutory deductions and the employee’s circumstances.

4) How does the “after 6 months” minimum wage work?
Once an employee completes six months of continuous employment with the same employer, the minimum monthly wage increases to €1,088 gross.

5) Does the minimum wage apply to part-time employees?
Yes. The full-time monthly amounts should be applied pro-rata for part-time work based on working hours relative to the full schedule.

6) Does the minimum wage apply to foreign employees working in Cyprus?
In general, minimum wage rules apply based on employment in Cyprus, not nationality. Employers should apply the correct wage framework to all staff working locally.

7) What happens if an employer pays below the minimum wage?
Underpayment can lead to employment disputes, back-pay corrections, and potential compliance exposure. From a practical standpoint, it also increases reputational and operational risk – especially for employers relying on regular hiring.

8) Do minimum-wage employees pay personal income tax in 2026?
Often not, because the tax-free threshold is €22,000, which is higher than the annualised minimum wage levels.

9) Does Cyprus minimum wage change every year?
Not automatically. Updates are introduced through formal decisions/decrees, so employers should monitor changes and implement them from the applicable effective date.