Cyprus recorded average hourly labour costs of €21.7 during the 2025 financial year, according to a report released on Tuesday by Eurostat.

The figure places Cyprus significantly below the European Union average of €34.9 and the euro area average of €38.2.

This data highlights a persistent cost gap between Cyprus and the higher-cost economies of the continent.

When compared with the previous year, hourly labour costs in Cyprus increased by 3.5 per cent.

This growth rate aligns exactly with the same 3.5 per cent rate observed in both Spain and Luxembourg.

The rise in Cyprus reflects a broader upward trend across Europe where costs increased by 4.1 per cent in the EU and 3.8 per cent in the euro area.

Despite this increase, Cyprus remains among the lower-cost countries within the euro area.

The island still sits above economies such as Greece, however, which recorded hourly labour costs of €18.2 in 2025.

Across the EU, labour costs continued to vary significantly with the lowest levels recorded in Bulgaria at €12.0, Romania at €13.6, and Hungary at €15.2.

At the opposite end of the spectrum, Luxembourg recorded the highest hourly labour costs at €56.8.

Denmark and the Netherlands followed closely behind with costs of €51.7 and €47.9 respectively.

The structure of labour costs in Cyprus follows the wider European pattern of wages, salaries, and non-wage costs such as employer social contributions.

Across the EU, these non-wage costs accounted for 24.8 per cent of total costs, while the share in the euro area stood at 25.6 per cent.

The lowest shares of non-wage costs were observed in Romania at 4.8 per cent, Lithuania at 5.5 per cent, and Malta at 5.8 per cent.

By contrast, France recorded the highest share at 32.3 per cent, followed by Sweden at 31.7 per cent and Slovakia at 28.6 per cent.

Within the euro area, labour costs increased in all countries except Malta, where they declined by 0.5 per cent.

The strongest increases were recorded in Bulgaria at 13.1 per cent, Croatia at 11.6 per cent, Slovenia at 9.3 per cent, and Lithuania at 9.2 per cent.

The slowest growth was seen in France at 2.0 per cent and Italy at 3.2 per cent.

This data places Cyprus among the lower-growth countries despite its overall annual increase.

Among EU countries outside the euro area, labour costs expressed in national currencies rose in every case.

Romania, meanwhile, recorded the largest increase at 10.6 per cent, followed by Hungary at 8.9 per cent and Poland at 8.8 per cent.

Eurostated added that Denmark posted the smallest increase among non-euro area members at 3.0 per cent.

The latest figures confirm that while Cyprus continues to maintain relatively lower labour costs, it is experiencing steady upward pressure in line with broader European trends.