Act III · The argumentsStory 22 of 31
One pay bill, four percentages
Public-sector pay cost €4.16 billion in 2025, the most it has ever cost. As a share of the economy it is close to its lowest in twenty years. Both are true, and that is why the argument never ends.
Anonymous: no sign-in, no email, and your IP address is never stored. How we handle answers
No budget argument in Cyprus is as loud as the one about public-sector pay, and none is conducted with so many different numbers. One side says the bill is out of control. The other says it is falling. They are usually both quoting correctly.
Four ways of sizing the same pay bill in 2025, and its share of the economy (GDP) since 2005.
← swipe to see the full chart →
Compensation of employees of general government: Eurostat gov_10a_main; GDP: Eurostat nama_10_gdp. State budget personnel spending, including pensions and gratuities: explanatory memorandum to the 2027 budget bill, 2025 outturn, cash basis.
What the numbers say
Start with the one figure nobody disputes. In 2025 the state paid its employees €4.16 billion. Three years earlier it paid €3.17 billion. That is a rise of 31% in three years.
Now divide it by something, and the picture depends entirely on what you choose.
- Of the whole economy: 11.4%. This is the measure used to compare countries.
- Of everything the state spent: 28.3%.
- Of the state budget: 29.4%. This counts public-service pensions as pay and counts loan repayments as spending.
- Of the state budget without loan repayments: 34.7%.
The line in the chart follows the first measure back to 2005. In 2012 pay took 14.7% of the economy. Then came the cuts of the crisis years, when the bill itself fell by a fifth between 2011 and 2016, and by 2022 it was 10.7%, the lowest of the period. It has edged up since, to 11.4%.
So the bill is the largest it has ever been in euro, and it has grown by nearly a third in three years. And it takes a smaller share of the economy than it did through most of the last twenty years. The economy simply grew faster.
Where the pay goes is less contested.
Pay of public employees by what they work on, 2024, € million.
← swipe to see the full chart →
Eurostat gov_10a_exp, compensation of employees of general government by function, 2024.
Teachers and others in education account for over a third of it. Health, the police, courts and fire service, and the armed forces account for another third between them.
What it means for you
Spread across everyone who lives here, public pay costs about €4,200 per resident a year. Of everything the state pays for, only pensions and benefits, taken together, cost more.
It is also the part of spending that is hardest to change quickly. Salaries are set by agreements and scales, and they rise automatically with the cost-of-living allowance, which follows prices. A minister can postpone a road. A payroll cannot be postponed.
What people argue
Is the pay bill too high? The Fiscal Council, the state's independent budget watchdog, warned in September 2026 that it is growing too fast. It points to the rise since 2022, to a workforce that grew from about 66,300 to 71,700, and to the cost-of-living allowance, whose cost it puts at €199 million in 2025 against €42 million in 2022. It proposes paying the allowance as a capped flat sum, not as a percentage of salary.
The Finance Minister answers with a share: pay as a proportion of the state budget, which he says falls from 28.2% in 2025 to 26.1% in 2027. The unions add that the allowance only restores what prices took away.
Each side has picked the measure that suits it. In euro the bill is at a record. As a share it is not. A fair summary needs both sentences.
Who is being counted? The €4.16 billion covers everyone the state employs: ministries, schools, the police and army, and public bodies outside the budget. The budget figures cover fewer people but add the pensions of retired public servants. Comparing a figure from one set with a figure from the other is the commonest mistake in the debate.
How we know
The pay bill is "compensation of employees of general government" in Eurostat's accounts: salaries plus the employer's social contributions, for every body classed as part of the state. The split by purpose is from the same source for 2024.
The two budget percentages use the 2025 outturn in the explanatory memorandum to the 2027 budget bill, where personnel costs, including pensions and gratuities, were €3.52 billion.
The Fiscal Council's figures on headcount and the allowance, and the minister's percentages, are as reported in the Cyprus press in September 2026. We have not checked them against the original documents.