The Ministry of Finance of the Republic of Cyprus issued Circular No. 1780 on 8/1/2026, setting out the framework for the application of the Cost of Living Allowance (COLA), aka A.T.A., for the period 1 January 2026 to 30 June 2027 in the public sector.
The Circular is based on the agreement on the reinstatement of the Automatic Price Indexation mechanism and on the confirmation of positive economic growth during 2025. Under the Circular, COLA is applied as follows:
- 1 January 2026 – 30 June 2026: COLA is payable at 80% of the annual increase of the relevant Consumer Price Index for 2025.
- 1 July 2026 – 30 June 2027: COLA increases to 90% of the same annual CPI increase, provided that the annual change in real GDP for 2025 is positive, as confirmed in the Circular.
The Circular further specifies the exact adjustment percentages applied to basic salaries, distinguishing between cases where COLA is already incorporated into the salary base and those where it is not, and sets out maximum monetary caps for the application of the allowance. The revised COLA amounts are taken into account for the purposes of future salary calculations, in accordance with the applicable rules.
Circular No. 1780 serves as a practical reference for public-sector payroll authorities and other competent bodies and requires careful application depending on the salary structure concerned.
For more information, please contact Thomas Christodoulou (thomas.christodoulou@demetriades.com) or your usual contact at Chrysses Demetriades & Co LLC.
