Employer of Record in Cyprus

Guide to Hiring Employees in Cyprus

Your guide to hiring employees in Cyprus, covering the employment landscape, working customs, and local labor laws.

Capital City

Nicosia

Currency

Euro

 (

)

Timezone

GMT +2

Payroll Frequency

monthly

Tax Year

1 January- 31 December

Employer Tax

15.40%

Languages

Greek

Turkish

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How to Hire In Cyprus

Hiring in Cyprus for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Cyprus in the following three ways:

  • Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Cyprus.
  • Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Cyprus’s labor laws and tax regulations.
  • Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Good To Know

Cyprus's convenient tax structure and reliable economic stability make it an excellent location for international operations.

A significant number of Cypriot people have completed postsecondary education, contributing to a highly educated and talented labour population.

Cyprus is strategically located at the crossroads of Europe, Asia, and Africa. This geographical advantage can be beneficial for businesses involved in international trade or seeking a central location for operations.

English is widely spoken and used in business in Cyprus. Additionally, many Cypriots are multilingual, with proficiency in languages such as Greek and often other European languages.

How to Employ In Cyprus

Businesses can only operate smoothly in Cyprus if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Cyprus below, to avoid any compliance issues.

Employment Contract Requirements

In Cyprus, the Labour Law does not require employment contracts to be in written form. However it is compulsory for employees to receive a written statement detailing their obligations, encompassing all aspects of the job. The key components included in the contract include:

  • Registered details of the company
  • Commencement date and duration of employment
  • Job role and workplace specifics
  • Compensation and benefits

Onboarding Process

We can help you get a new employee started in Cyprus quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Cyprus

The working hours in Cyprus differ across various employment sectors and are subject to collective agreements, with the majority of employees typically working between 38 and 40 hours per week.

Overtime in Cyprus

The maximum working hours in Cyprus are set at 48 hours per week and 10 hours per day, encompassing any overtime. Although there are no legal regulations governing compensation for overtime work in Cyprus, it is typically determined through individual or collective agreements.

Probation Period in Cyprus

Employees undergo a minimum six-month probation period where employers can terminate them without giving a reason.

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Payroll Management in Cyprus

Fiscal Year in Cyprus

1 January- 31 December is the 12-month accounting period that businesses in Cyprus use for financial and tax reporting purposes.

Payroll Cycle in Cyprus

The payroll cycle in Cyprus is usually monthly, with employees being paid on or before the last day of the month.

Minimum Wage in Cyprus

The minimum wage for employees in Cyprus is typically 6.25 EUR per hour, amounting to ~1,000 EUR per month for a typical 40 hour work week.

Bonus Payments in Cyprus

It is not mandatory, but it is a common practice to provide employees with a 13th salary in December.

Overview of Employment Taxes in Cyprus

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 14.9% on top of the employee salary in Cyprus.

Tax TypeTax Rate
Social Insurance (applied on salary up to 62,868 EUR annually)8.8%
National Health System (GESY) (applied on salary up to 180,000 EUR annually)2.9%
Social Cohesion Fund2%
Severance Fund (applied on salary up to 62,868 EUR annually)1.2%
Training and Development (applied on salary up to 62,868 EUR annually)0.5%

Employee Payroll Tax Contributions

In Cyprus , the typical estimation for employee payroll contributions cost is around 10.95%.

Tax TypeTax Rate
Social Insurance (applied on salary up to 62 868 EUR annually)8.8%
National Health System (GESY) (applied on salary up to 180,000 EUR annually)2.65%

Individual Income Tax Contributions

The personal income tax in Cyprus varies between 0% and 35%, and it is determined based on progressive rates. Various factors, including household status and the number of dependents, can influence the overall tax rates.

Income BracketTax Rate
0 - 19,500 EUR0%
19,501 EUR - 28,000 EUR20%
28,001 EUR - 36,300 EUR25%
36,301 EUR - 60,000 EUR30%
60,001 EUR And above35%

Pension in Cyprus

If one is insured in Cyprus through employment, self-employment, or voluntary coverage, they can receive an old-age pension at 65. To qualify, they need to meet certain insurance conditions. The monthly social pension is 81% of the full basic statutory pension and is paid by the Social Insurance Fund.

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The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Cyprus tailored to your needs.

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Leave Entitlements And Company Policies In Cyprus

Mandatory Leave Entitlement in Cyprus

The annual leave entitlement in Cyprus is 20 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Cyprus

In Cyprus, public holidays that happen to fall on the weekend are typically not carried over or observed.

HolidayDate
New Years Day1 January
Epiphany6 January
Green MondayFebruary, day changes yearly
Greek Independence Day25 March
National Day1 April
Orthodox Good FridayApril, day changes yearly
Orthodox Easter SundayApril, day changes yearly
Orthodox Pentecost MondayApril, day changes yearly
Labour Day1 May
Orthodox Whit MondayJune, day changes yearly
Assumption Day15 August
Cyprus Independence Day1 October
Ochi Day28 October
Christmas Eve24 December
Christmas Day25 December
Boxing Day26 December

Paid Time Off in Cyprus

Employees on a five-day workweek are entitled to 20 working days of leave, while those on a six-day workweek are entitled to 24 working days of leave within one year of employment. The employment contract or collective agreement may stipulate additional days of annual leave with pay.

Maternity Leave In Cyprus

Pregnant employees with 180 consecutive days of work for the same employer are entitled to 22 weeks of paid leave. Two weeks must be taken before the child's birth. During this period, the employee will receive 72% of their salary, and Social Security will be responsible for providing this pay.

Paternity Leave In Cyprus

Employees with 180 consecutive days of work for the same employer are eligible for 14 days of paid paternity leave. This leave must be taken at a time between the birth of the child and 2 weeks after the end of the maternity leave. During this period, the employee will receive 72% of their salary, with Social Security being responsible for providing this pay.

Sick Leave In Cyprus

Employees are eligible for paid sick leave for a maximum of 156 days. The payment rates and responsible payers vary based on the length of the sick leave:

  • 0 to 3 days: 100% of the base salary (paid by the Employer)
  • 4 to 156 days: 60% of the base salary (paid by Social Security)

Parental Leave In Cyprus

Parents employed continuously with the same employer for six months or more are entitled to unpaid parental leave for a duration of 18 weeks per child, applicable to children up to the age of eight.

Bereavement Leave

In the event of the death of a direct family member, employees are eligible for: 5 days of paid leave for the death of a child or spouse, 3 days for the death of a parent or sibling or 1 day for the death of another family member.

Military Leave

Employees called to perform military service are covered by assimilated insurance, provided by the Social Insurance Services.

Employment Termination and Severance Policies in Cyprus

Termination Process in Cyprus

Employment contracts may be terminated based on valid reasons. Termination without notice may also occur in situations involving a breach of the employment contract. The reasons for termination include but not limited to:

  • Employee underperformance
  • Gross misconduct
  • Long-term illness
  • Redundancy or other business-related reasons

Notice Period in Cyprus

Notice periods are contingent on the duration of an employee's tenure with the employer. The breakdown is as follows:

  • 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 and above: 8 weeks' notice

Severance in Cyprus

Severance pay entitlements is determined by the employee's duration of service with the employing organization. The scale is structured as follows:

  • 2 weeks' pay for each year: Employment for up to 4 years
  • 2.5 weeks' pay for each year: Employment for 5 to 10 years
  • 3 weeks' pay for each year: Employment for 11 to 15 years
  • 3.5 weeks' pay for each year: Employment for 16 to 20 years
  • 4 weeks' pay for each year: Employment for over 20 years

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Employer of Record for Cyprus

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FAQS

FAQs About Hiring In Cyprus

What are the standard employment terms in Cyprus?

Standard employment terms in Cyprus include working hours, leave entitlements, and conditions outlined in employment contracts, governed by labor laws and regulations.

Is there a minimum wage requirement for employees in Cyprus?

Cyprus has a minimum wage requirement, ensuring employees receive a baseline level of compensation set by the government.

Are there specific regulations for hiring foreign workers?

Hiring foreign workers in Cyprus involves obtaining work permits, and employers must comply with immigration regulations and labor laws.

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