Negotiated wage growth is expected to slow in 2025 and beyond, according to the latest reading of the European Central Bank (ECB) wage tracker, which has been updated to include data from September.

The wage tracker, which monitors active collective bargaining agreements, indicated negotiated wage growth with smoothed one-off payments of 4.7 per cent in 2024, before easing to 3.2 per cent in 2025.

The 2024 figure was based on a coverage of 50.6 per cent of employees in participating countries, while the 2025 figure was based on coverage of 48.7 per cent.

Other versions of the wage tracker show slightly varied results for the same periods. The tracker that uses unsmoothed one-off payments indicated negotiated wage growth of 4.9 per cent in 2024 and a lower 3.0 per cent in 2025. Conversely, the wage tracker excluding one-off payments suggested a growth of 4.2 per cent in 2024 and an increase to 3.9 per cent in 2025.

The ECB stated that the downward trend in the forward-looking wage tracker component is partly a reflection of two factors.

It reflects the mechanical impact of large one-off payments that were made in 2024 but are not included in 2025, and the frontloaded nature of wage increases observed in some sectors in 2024.

Forward-looking data for the third quarter of 2026 showed a mixed picture for the various indicators.

The headline wage tracker (with smoothed one-off payments) stood at 2.2 per cent, which is an increase from 1.8 per cent recorded in the first half of 2026.

The wage tracker with unsmoothed one-off payments also stood at 2.2 per cent, marking a decrease from 2.5 per cent in the first half of 2026.

Moreover, the wage tracker excluding one-off payments stood at 2.4 per cent, down from 2.6 per cent in the first half of 2026.

The ECB also reported that employee coverage for the third quarter of 2026 was notably lower at just 19.4 per cent.

This compares to a 31.0 per cent coverage for the first half of 2026 and 47.2 per cent for the fourth quarter of 2025.

Cyprus wages continue to rise but disparities persist

Meanwhile, provisional figures from the Cyprus Statistical Service (Cystat) showed that the average gross monthly earnings in Cyprus reached €2,476 in the second quarter of 2025, marking a 4.2 per cent rise from the previous year.

This continues the wage growth trend from 2024, when the average gross monthly salary stood at €2,483, though wage inequality persists, as evidenced by the 2024 median wage of €1,881 being significantly lower than the average.

Furthermore, the 2025 Q2 data showed that the gender pay gap continues to be an issue, with men earning an average of €2,656 and women €2,251.

However, the year-on-year increase was higher for women at 4.7 per cent, compared to 3.8 per cent for men, suggesting a gradual narrowing of the gap.

In terms of income distribution, 40 per cent of employees earned between €1,500 and €2,999, while a substantial 36.1 per cent earned less than €1,500.

Only 5.1 per cent of the workforce earned €6,000 or more, Cystat reported.

It added that non-Cypriot nationals were more likely to be in the lowest bracket (48.7 per cent earning less than €1,500) and the highest bracket (7.7 per cent earning €6,000 or more) compared to Cypriot nationals, reflecting a concentration in both lower and high-specialised roles.

Finally, Cystat reported that salaries in 2024 saw the strongest growth in Information and Communication (8.1 per cent), with the highest overall average earnings recorded in financial and insurance activities (€4,710).