Payroll System

Cyprus Payroll System

Cyprus has an attractive payroll system with Euro 19,500 tax free income, the largest in the EU and low Social Insurance Contribution cost for the employer of only 12.5% additional cost to the company*. Together with the "First Employment in the Republic" rules Cyprus becomes very attractive for its low payroll cost.

During 2021 the National Health Care System (GESY or NHS) for employers is 2.90% and for employees 2.65%.

Together with the NHS the total employment cost becomes 15.4%

Employment Tax Thresholds

FROM (€)	TO (€)	TAX
0	19,500	0%
19,500	28,000	20%
28,000	36,300	25%
36,300	60,000	30%
over 60,000	-	35%

* Social Insurance Contributions Cost for Cyprus companies comprises of the following:

Employees Contribution: 8.8%

Employers Contribution: 8.8%

Social Cohesion Fund: 2%

Redundancy Fund: 1.2%

Industrial Training: 0.5%

NHS: Employees 2.65% & Employers 2.90%

Note: Holiday fund of 8% is optional usually used for seasonal workers.

Payroll Calculators

Use Cyprus Payroll Calculators:

Gross to Net Calculator

Social Security Calculator

Dividend Tax

Other Useful Calculators:

Capital Gains (disposal of immovable property in Cyprus)

VAT

Download our Payroll Guides and Publications



How do you process the payroll request? How long does it take to register the Company or Employee with local authorities for payroll purposes? Do you have a Software that generates payslip in English language besides local ones?? What is payslip delivery model of your firm. We prefer electronic payslip secured by password sent directly to the employees. Which are the main labor / tax related topics you can provide assistance with? How do you process annual tax reconciliation? Are you able to offer onsite support?? How could you support our firm as tax consultant for payroll related matters (i.e. defining if certain benefits or benefits in kind are subject to tax, social and health insurance, tax savings proposal, etc)? Would you be able to prepare tax returns of relocated employees (EU and third-country citizens)? Are you able to provide data/reports to HR per request? e.g. for completion of confirmations of income etc.? Are you able to provide payroll report in a format that can be directly uploaded in SAP for the accounting posting? Which reports you are able to provide (e.g. holidays accrual)? Is it possible to upload a confidential payroll file into our bank and pay directly from our account (the bank provides a template)? Please explain your method. How the data transfer management process works form our existing payroll to yours? Can we mention the Client in ROE model (Remote Overseas Employer)? Does it pose any Labour leasing risk? Is the Garden Leave term is common/valid/legal in Cyprus? Moral rights are not defined under Cypriot laws. Should we keep the definition regardless of application in Cyprus (in Greece this is applied)? Fixed Term Contracts Renewals in Cyprus What is the minimum/statutory term and can this be negotiated with the client? Can we mention the Client in ROE model (Remote Overseas Employer)? Does it pose any Labour leasing risk in Cyprus? Is Travel undertaken outside normal working hours remunerated in Cyprus? What happens when an employee is planning to work remotely from a country different to the Location stated above for more than 30 days, it is the Employee’s obligation to inform the Employer at least 2 weeks before the departure date? How many days of work are considered overtime in Cyprus? Shall we include in the employment agreement the bonus status? How are Cyprus courts treating disputed bonuses? An employee has to apply for sick pay 48 hours from the start of the leave. It is paid by the state. Can check if it is paid directly to EE or through ER. How are severance payments in Cyprus calculated: What are the termination periods in Cyprus? Cyprus Employment Contracts: Non-Competition and Non-Solicitation clauses.

Payroll System

Cyprus Payroll System

Employment Tax Thresholds

* Social Insurance Contributions Cost for Cyprus companies comprises of the following:

Payroll Calculators

Use Cyprus Payroll Calculators:

Other Useful Calculators:

Download our Payroll Guides and Publications

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