The Cyprus Employers and Industrialists Federation announced a permanent COLA agreement signed on November 13, 2025, effective from January 1, 2026, affecting applicable businesses and organizations.
The Cyprus Employers and Industrialists Federation (OEB) announced that a permanent agreement has been reached with social partners regarding the payment of the Cost-of-Living Adjustment (COLA).
The agreement was signed today, Thursday, November 13, 2025, in the presence of the President of the Republic, whose contribution was catalytic.
The agreement is effective from January 1, 2026, and applies to businesses and organizations where the COLA system is used according to employment terms.
The agreement provides for the gradual full restoration of the Indexation Allowance rate from 66.7% to 100% of the Consumer Price Index increase, excluding taxes. The schedule is 80% in January 2026, 90% in July 2026, and 100% from July 2027 onwards, with annual adjustments in July.
The COLA is paid if the previous year’s annual percentage change in growth rate is positive, with a new ceiling of 4% inflation for calculating the maximum annual increase in the Indexation Allowance.
Additionally, the COLA is linked to the adjustment of the National Minimum Wage, which is updated every two years by incorporating the previous two years’ Indexation Allowance into the Minimum Wage Decree.
For further information, contact the Department of Labor Relations & Social Policy of OEB at 22-643000.
