Several jurisdictions have confirmed new minimum wage rates effective 1 January 2026, including Cyprus, Macao SAR, the Netherlands, and Portugal. While minimum wage updates typically seem straightforward, their operational impact can extend to pay structures, eligibility rules, validation controls, and contribution calculations.
Cyprus
Cyprus' Ministry of Labour and Social Insurance approved an increase to the national minimum wage, effective 1 January 2026. The rates vary depending on the length of service with the same employer: the minimum wage on appointment rises to €979 gross per month for full-time employment, and after six months of continuous service with the same employer, it increases to €1,088 gross per month.
For payroll teams, the primary operational focus is on eligibility monitoring. The six-month service threshold must be consistently applied across employment records, including rehires and employee transfers where relevant, to ensure the correct minimum wage tier is used.
Macao SAR
The Macao SAR Labour Affairs Bureau (DSAL) has confirmed updated statutory minimum wage rates. Effective 1 January 2026, the rates are: 7,280 patacas per month, 1,680 patacas per week, 280 patacas per day, 35 patacas per hour, and for piecework, an average of 35 patacas per hour.
The announcement also confirms enforcement measures. Employers must pay at least the statutory minimum wage, including for nonresident workers. Where an infringement occurs, the penalty is 20,000 to 50,000 patacas per affected worker, and the DSAL may reassess authorisations for employers permitted to hire nonresident workers.
Netherlands
Unlike some countries with minimum wages, the system in the Netherlands determines minimum wage amounts solely on an hourly basis. The relevant minimum wage for the pay period (e.g., weekly or monthly) depends on the number of working days, working hours, and other contractual agreements.
The minimum hourly wage in the Netherlands increased effective 1 January 2026 to €14.71 for employees aged 21 and older. For employees between ages 15 and 20, the minimum wage also increased, ranging from €4.41 for 15-year-olds to €11.77 for 20-year-olds.
Portugal
Portugal’s minimum wage increased from 1 January 2026, with different statutory rates by region. The announced figures are €920 for Mainland Portugal, €966 for the Azores, and €980 for Madeira.
In addition to the minimum wage adjustment, the Social Support Index has been set at €537.13, and the same update includes increases to pensions and social benefits within a specified range. Payroll teams should assess whether any benefits, contribution bases, or statutory calculations within their scope are linked to this index.
Payroll's Actions
Meeting minimum wage requirements involves more than just adjusting a single rate. Recommended actions include the following:
- Work closely with your system and service providers to update the payroll system rate tables and salary ranges for all relevant jurisdictions, as many experience annual increases each January.
- Review pay element configuration to ensure that any allowance, premium, or overtime handling complies with local minimum wage regulations and adheres to local policy and practice definitions. This is especially important where organisations use multiple pay elements to meet minimum wage thresholds.
- Assess secondary impacts beyond just basic wages. In Macao SAR, the DSAL announcement highlights direct enforcement consequences. This aligns with a global trend of stricter enforcement and audits on minimum wages.
Payroll teams should consider these changes as a control and validation exercise, rather than merely a pay rate adjustment, and ensure that documentation and audit evidence are retained for the effective date.
Join The Payroll Community to connect with more than 30,000 of your payroll peers worldwide. Gain access to the Global Forum, where you can network with payroll professionals, ask follow-up questions about this article, and more.
Become a PayrollOrg Global Subscriber for access to additional global payroll resources, including Global Payroll eMagazine, news alerts, and more.
Max van der Klis-Busink, MCIPP, RPP, is the Owner of Passion For Payroll and Vice President of Global Strategy on PayrollOrg’s Board of Directors.
