Payroll and Benefits Guide Cyprus
Last updated: May 03, 2023
Contributions
Employer
Employer Payroll Contributions
|
8.30% |
Social Insurance (applied on salary up to 60,060 EUR annually) |
|
2.00% |
Social Cohesion Fund |
|
1.20% |
Severance Fund (applied on salary up to 60,060 EUR annually) |
|
0.50% |
Training and Development (applied on salary up to 60,060 EUR annually) |
|
2.90% |
National Health System (GESY) (applied on salary up to 180,000 EUR annually) |
|
14.90% |
Total Employment Cost |
Employee
Employee Payroll Contributions
|
8.30% |
Social Insurance (applied on salary up to 60,060 EUR annually) |
|
2.65% |
National Health System (GESY) (applied on salary up to 180,000 EUR annually) |
|
10.95% |
Total Employee Cost |
Employee
Employee Income Tax
|
0.00% |
Up to 19,500.00 EUR |
|
20.00% |
19,500.00 EUR – 28,000.00 EUR |
|
25.00% |
28,000.00 EUR – 36,300.00 EUR |
|
30.00% |
36,300.00 EUR – 60,000.00 EUR |
|
35.00% |
60,000.00 EUR and over |
Employer taxes
Employee taxes
Minimum Wage
General
The National Minimum Wage is set at 940 EUR per month, however, for the first six months of employment it is set at 885 EUR per month.
Payroll
Payroll Cycle
The payroll cycle in Cyprus is generally monthly, and payments are to be made no later than the last working day of the month.
13th Salary
While not mandatory, it is customary to pay employees a 13th salary in December.
Working Hours
General
The standard workweek in Cyprus consists of a maximum of 44 hours across five days, although a six-day week is possible. Employers must be granted written permission from employees in order to increase the employee’s working hours.
Overtime
All work more than the standard working hours a week is to be paid as overtime and is regulated by the employment contract or collective bargaining agreements. The maximum number of hours during a workweek is 48 and is averaged over a 4-month period.
All hours in excess of 40 hours a week are paid at an overtime compensation rate; this rate is stipulated in the employment contract or collective bargaining agreements.
Working Week
Monday-Friday
Leave
Paid Time Off
The standard leave entitlement for employees who work a five-day week is 20 working days per year and for employees who work a six-day week is 24 working days per year. Additional annual leave days might be mandated within the Employment Contract or applicable Collective Bargaining Agreement. Entitlement for annual leave is once 48 weeks have been worked with a single employer.
It is permitted to carryover unused leave days providing there is mutual agreement to do so from both the employer and employee, capped at the maximum number of days of leave that an employee can accrue over 2 year period (i.e. 40 or 48 days).
An employee’s wages during the annual leave period is paid either by the employer directly or by the Central Holiday Fund.
Public Holidays
There are 15 public holidays. Public holidays that fall on the weekend are usually lost.
Sick Days
Employees are entitled to paid sick leave from the fourth day of sickness, paid for by Social Security. The employee must submit a medical certificate to the Social Security Administration within 48 hours of the start of the sick leave. The social insurance covers sick pay up to a period of 312 days at 60% of salary (the % of salary might increase where there is a dependent spouse and children).
Maternity Leave
Female employees are entitled to 18 weeks of maternity leave for the birth of their first child, 22 weeks maternity leave for the birth of their second child and 26 weeks maternity leave for the birth of all subsequent children. It is compulsory to take 11 weeks of maternity leave and are generally taken 2 weeks before the due date and the remainder after.
The amount of the maternity allowance is determined based on the weekly average of actual and simulated insurable earnings of the insured within relevant tax year. The maternity allowance includes a basic allowance and a supplementary allowance. The weekly amount of the basic allowance is equal to 72% of her salary, rising to 80%, 90% or 100%, when the beneficiary has one, two or three dependents, respectively. If the beneficiary receives part of her earnings from her employer for the period she is entitled to maternity benefit, the benefit is reduced so that the sum of the allowance and emoluments she receives not to exceed her full emoluments.
The application for maternity benefit must be submitted within 21 days of the day from which the allowance is required. Submitting the application for maternity allowance takes place immediately after completing the twenty-fifth (25th) week of pregnancy. Workers must also inform their employers of pregnancy in advance and provide a medical certificate which indicates the expected due date.
PAID MATERNITY LEAVE (DAYS)
Paternity Leave
Fathers are entitled to 2 consecutive weeks of paid paternity leave within the 16 weeks following the birth of a child, paid by the Social Insurance Fund at 75.20% of the employee’s regular salary.
Parental Leave
The right to parental leave covers all employees who have children under the age of 8. According to the law, every eligible employee can take unpaid parental leave of up to eighteen weeks for each child.
Other Leave
Depending on collective bargaining agreements or the employment contract, an employee may be allowed additional leave types.
Bereavement: Employees are entitled to up to 5 days of paid leave due to a death of a direct family member.
Adoption: Employees who want to adopt a child under the age of twelve years are entitled to up to 16 continuous weeks’ leave starting from the date they begin to take care of the adopted child.
Military: Employees called to perform military service are covered by assimilated insurance (Social Insurance Services).
Termination
Termination Process
Employers can terminate employment according to lawful justified reasons including unsatisfactory performance, redundancy, force majeure, termination at the end of a fixed period, commission of a serious disciplinary or criminal offence, indecent behavior, or repeated violation of employment rules.
Employers can terminate a fixed-term contract for reasons related to business needs, personal reasons or worker misconduct.
Notice and a written explanation for the termination are required. If the reason is misconduct, a warning needs to be given and the employee gets a chance to explain their actions.
Severance is paid and all statutory obligations such as paid time off are compensated.
Notice Period
The notice period for a temporary or permanent employee is dependent on the employee’s length of employment:
- 26-51 weeks of employment: 1 week’s notice
- 52-103 weeks of employment: 2 weeks’ notice
- 104-155 weeks of employment: 4 weeks’ notice
- 156-207 weeks of employment: 5 weeks’ notice
- 208- 259 weeks of employment: 6 weeks’ notice
- 260- 311 weeks of employment: 7 weeks’ notice
- 312 weeks or more: 8 weeks’ notice
No notice is required during the probation period or when the employee has committed a serious offense.
Severance Pay
The severance pay varies based on the length of employment:
- 2 weeks’ severance for each year of employment up to 4 years
- 2.5 weeks of wages for each year between 5-10 years of employment
- 3 weeks of wages for each year between 11-15 years of employment
- 3.5 weeks of wages for each year between 16-20 years of employment
- 4 weeks of wages for each year over 20 years of employment
Probation Period
The probationary period in Cyprus is dependent on the type of role and is stipulated within the employment agreement. In general, probation periods are between six months and two years.
VISA
VISA
The Cyprus immigration system provides several options for employers of foreign nationals. Cyprus is a member of the European Union. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.
Business visitors obtain a business visa to travel to Cyprus if they are not visa-exempt based on their nationality. Business visits are limited to 90 days within 180 days and require a detailed support or invitation letter outlining the nature and duration of activities.
The main work authorization categories are the EU Intracompany Transferee (ICT) Permit suitable for the intracompany transfer of managers, specialists, and trainees from outside the EU, and the Employment Permit for Local Hires, suitable for locally hired employees and intracompany transfers who do not qualify for an EU ICT Permit.
VAT
General
19% standard rate.
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Payroll and Benefits Guide
in Cyprus
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Day | Date | Holiday | Notes |
|---|---|---|---|
| Sunday | Jan-1 | New Year’s Day | |
| Friday | Jan-6 | Epiphany | |
| Monday | Feb-27 | Green Monday | |
| Saturday | Mar-25 | Grrek Independence Day | |
| Saturday | Apr-1 | National Day | |
| Friday | Apr-7 | Good Friday | |
| Sunday | Apr-9 | Easter Sunday | |
| Monday | Apr-10 | Easter Monday | |
| Monday | May-1 | Labour Day | |
| Monday | Jun-5 | Whit Monday (Pentecost) | |
| Tuesday | Aug-15 | Assumption Day | |
| Sunday | Oct-1 | Cyprus Independence Day | |
| Saturday | Oct-28 | Ochi Day | |
| Monday | Dec-25 | Christmas Day | |
| Tuesday | Dec-26 | Boxing Day |
Hiii at kiosk mini supermarket if they are open on public holidays they should have to pay double???and they have to pay 13th salary ??? Plz i need information about this.
The overtime rate of compensation should be stipulated in your employment contract or collective bargaining agreements. Although a 13th salary is customary, it is not required.
Hi, if your employment has been terminated as the offices in Cyprus are closing down , does the company have to pay any annual leave not taken in addition to the severance pay?
Severance pay and annual leave entitlement are 2 separate things. Accrued annual leave should always be paid out during any termination if the worker has not been able to use it. Severance entitlement will not remove this need to pay out annual leave. For any termination due to office closure, local legal counsel should be sought.
If the employer is paying 13th salary, and stipulates so in the employees contract, and the employee resigns – does the employer need to pay the 13th salary at the end of the notice period (adjusted for months worked).
Yes, the worker will be entitled to a pro rated 13 salary for the period they have worked.