From the start of the new year, thousands of public and private sector employees in Cyprus will see a 2.44% increase in their salaries due to a readjustment of the cost-of-living allowance (CoLA).
As per a circular from the Ministry of Finance, the index-linked allowance, effective January 1, 2024, for twelve months, will rise by 2.44%. This brings it from 344.45% to 355.29% of basic salaries, with a minimum allowance set at €13,368.
The circular specifies that the index-linked allowance will factor into the remuneration calculations for officials, employees, and workers whose basic salaries haven’t integrated any part of the index-linked allowance.
It’s noteworthy that the CoLA’s performance rate is pegged at 66.7% against increases in the Consumer Price Index. This agreement was reached in May, reflecting a collaborative effort with the new government. In previous years, the CoLA payment stood at 50% of inflation.
An estimated 180,000 employees, comprising 100,000 in the private sector and 80,000 in the public sector, are expected to benefit from CoLA out of the total workforce of 465,000 in Cyprus.
CoLA is an increase made to wages to counteract the effects of rising prices in the economy, caused by inflation.
CoLA is typically equal to the percentage increase in the Consumer Price Index for a specific period. The Consumer Price Index represents the average prices of a basket of goods and is used to measure inflation.
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