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Payroll and Benefits Guide Cyprus

Last updated: May 03, 2023

Currency
Euro (EUR)
Employer Taxes
22.90%
Payroll Frequency
Monthly
Employee Costs
10.95%
Capital
Nicosia
Date Format
dd/mm/yyyy
Fiscal Year
1 January- 31 December

Contributions

Employer

Employer Payroll Contributions

8.30%

Social Insurance (Maximum annual earnings of 60,060 EUR)

2.00%

Social Cohesion Fund

1.20%

Severance Fund (Maximum annual earnings of 60,060 EUR)

0.50%

Training and Development (Maximum annual earnings of 60,060 EUR)

2.90%

National Health System (ESY)

8.00%

Holiday Fund (if not exempt)

22.90%

Total Employment Cost

Employee

Employee Payroll Contributions

8.30%

Social Insurance

2.65%

National Health System (ESY)

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

Highest
Lowest

Employee taxes

Highest
Lowest

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

In Cyprus, paid annual leave entitlement is dependent on the number of years of employment.
The standard leave entitlement for employees who work a five-day week is 20 days per year or 24 days per year for employees who work a six-day week. Further entitlement for leave is outlined in the employment contract or collective agreement.
Employees become eligible after 48 weeks of employment with a single employer and the employer reserves the right to accept or deny any leave requests due to the demands of the business.

Vacation Days
Public Holidays
Highest
Lowest

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. The leave increased to 22 weeks for twins and 26 weeks for triplets. 11 weeks of maternity leave are compulsory and are generally taken two weeks before the due date and the remainder after. To be entitled to maternity leave, the pregnant employee must provide a medical certificate certifying her pregnancy and the expected due date.

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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Questions & Answers

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Ranjeet Kaur
Ranjeet Kaur
1 year ago

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.

Erez Greenberg
Admin
Erez Greenberg
1 year ago
Reply to  Ranjeet Kaur

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.

Demitra
Demitra
10 months ago

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?

Erez Greenberg
Admin
Erez Greenberg
9 months ago
Reply to  Demitra

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.

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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...

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All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

Cyprus 2023
Download:
CSV
PDF
ICS
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