A Cabinet decision to fix the national minimum wage at €1,088 has sparked a fierce backlash from both unions and bosses, leaving the new Labour Minister, Marinos Mousiouttas, facing a baptism of fire. While the Christmas break offers a temporary lull, both sides are already sharpening their blades for a fresh confrontation in the new year.
Unions are set to huddle before the end of 2025 to coordinate their response, claiming the government has favoured employers over struggling workers. Conversely, the employers’ federation (OEB) has scheduled its own summit for 14 January 2026. The OEB warned of a “domino effect,” arguing that the hike will force businesses to choose between hiking prices for consumers or facing potential bankruptcy as they struggle to absorb the costs.
The hidden cost of employment
The headline figure of €1,088 masks a complex web of mandatory contributions that leave a significant gap between what a boss pays and what a worker actually receives.
For employers, the true monthly cost of a minimum-wage worker is €1,255. This is due to a mandatory 15.4% surcharge on top of the gross salary:
Social Insurance: 8.8%
NHS (GeSY): 2.9%
Social Cohesion Fund: 2%
Redundancy Fund: 1.2%
HR Development Authority (AnAD): 0.5%
If a business also offers a Provident Fund (typically around 5%), the cost jumps by another €55 per month.
Shrinking pay cheques
Despite the high cost to businesses, workers on the national minimum wage will see less than four figures in their bank accounts. Mandatory deductions of 11.25% (8.8% for Social Insurance and 2.65% for GeSY) mean that from a €1,088 gross salary, a worker takes home just €963.
The situation is even tighter for those in their first six months of employment, where the gross rate has risen from €900 to €979. After the state takes its cut of €112, these workers are left with a take-home pay of approximately €867.