# Cost to Hire in Cyprus: employer cost and take-home, 2026

> What an employee really costs in Cyprus in 2026. Every employer fund itemised, the €68,904 cap, take-home pay by tax band, a team budget builder, and own entity against Employer of Record. Reviewed by ICPAC and ICAEW chartered accountants in Nicosia.

Publisher: Aqualis Ltd, Nicosia, CY. Members of ICPAC and ICAEW.
Last reviewed: 2026-09-20. Figures marked "Confirm" await adviser sign-off.
Canonical URL: https://costtohirecyprus.com/

## Short answer

In 2026 an employer in Cyprus pays about 15.4% on top of gross salary: social insurance 8.8%, Redundancy Fund 1.2%, training levy 0.5%, Social Cohesion Fund 2.0% and General Healthcare System 2.9%. The first three stop at earnings of €68,904 a year, so senior hires cost proportionally less. A €48,000 salary costs €55,392. The employee pays 8.8% social insurance and 2.65% healthcare, then income tax from 0% to 35%, and takes home about €3,154 a month. A 13th salary is customary, not statutory. The minimum wage is €1,088 a month after six months.

## Cyprus employer cost and employment rules, 2026

- **Social insurance**: 8.8% from the employer and 8.8% from the employee, on earnings up to €68,904 a year (€5,742 a month) (In law)
- **Redundancy Fund and training levy**: Employer only. 1.2% to the Redundancy Fund and 0.5% to the Human Resource Development Authority, on the same €68,904 cap (In law)
- **Social Cohesion Fund**: Employer only. 2.0% of total earnings, with no cap (In law)
- **General Healthcare System**: 2.90% from the employer and 2.65% from the employee, on income up to €180,000 a year (In law)
- **Central Holiday Fund**: 8% of capped earnings, unless the employer holds an exemption and pays annual leave directly. Most office employers are exempt (Confirm)
- **National minimum wage**: €979 a month on hiring and €1,088 after six months of continuous service, from 1 January 2026. Some sectors have their own orders (In law)
- **13th salary**: Not statutory. Binding once it is in the contract, a collective agreement or established company practice (In law)
- **Annual leave and public holidays**: 20 working days for a five-day week, 24 for a six-day week. Around 14 to 15 public holidays a year, paid where the contract or practice says so (In law)
- **Sick pay**: No statutory employer sick pay. Social Insurance pays sickness benefit from the fourth day, at about 60% of insured earnings. Many contracts top this up (Confirm)
- **Maternity and paternity leave**: Maternity 18 weeks, rising to 22 and 26 weeks for later children. Recent sources give 22 weeks from the first child. Paternity two weeks. Both paid by Social Insurance at about 72% (Confirm)
- **Probation**: Up to six months. Older rules allowed a written extension to 104 weeks, which the 2023 transparency law has put in doubt (Confirm)
- **Notice by the employer**: None in the first 26 weeks. Then one week, rising in steps to eight weeks after 312 weeks (six years) of service (In law)
- **Redundancy payments**: Paid by the state Redundancy Fund after 104 weeks of service. Two weeks of pay per year for the first four years, rising to four weeks per year for years 21 to 25 (In law)
- **Working hours**: No more than 48 hours a week including overtime, averaged over four months. Written terms of employment within seven days of the start date (In law)
- **Paying contributions**: Due by the end of the month after the pay month. Late payment carries a surcharge reported at 3% for the first month, rising by 3 points a month to a maximum of 27% (Confirm)
- **Income tax withholding**: The employer withholds income tax from each payslip under pay as you earn and pays it by the end of the following month, with an annual employer return (In law)

## How to hire your first employee in Cyprus

1. **Choose the route and check the basics.** Decide between your own company and an Employer of Record. Check the salary against the minimum wage and any permit salary floor, and confirm whether a work permit is needed.
2. **Register as an employer.** Register the company with Social Insurance Services to get an employer number, and with the Tax Department for pay as you earn. Register the new employee before the first day of work.
3. **Issue written terms.** Give the employee the essential terms in writing within seven days: parties, place of work, role, start date, pay and its components, hours, probation and notice.
4. **Run payroll and pay over.** Issue the payslip, then pay contributions and withheld income tax by the end of the month after the pay month. Diarise the annual employer return.

## Free tools on this page

- **Cyprus employer cost and take-home calculator**: Takes a gross annual salary in euros and itemises the total employer cost in Cyprus for 2026: social insurance, Redundancy Fund, training levy, Social Cohesion Fund, General Healthcare System and the optional Central Holiday Fund, with caps applied. It also computes the employee's contributions, income tax by band, the 50% exemption for relocated staff, and net annual and monthly pay.
- **Cyprus team payroll budget builder**: Builds an annual and monthly payroll budget for up to eight roles in Cyprus. For each role it applies 2026 employer contribution rates and caps per person, then totals employer cost, the social insurance and healthcare contributions payable each month, and the income tax to withhold.
- **Cyprus own entity or Employer of Record comparison**: Compares hiring in Cyprus through your own company with hiring through an Employer of Record. From planned headcount, start date, fee and running cost assumptions it returns the break-even headcount, the annual cost of each route, a recommendation in words and a warning on permanent establishment risk.

## Questions and answers

### How much does an employee cost on top of salary in Cyprus?

About 15.4% for salaries up to €68,904 a year. That is social insurance 8.8%, Redundancy Fund 1.2%, training levy 0.5%, Social Cohesion Fund 2.0% and General Healthcare System 2.9%. Above the cap only 4.9% continues, so a €150,000 salary carries about 9.7%. Add 8% if the Central Holiday Fund applies to you, and a twelfth more if you pay a 13th salary on top.

### Is a 13th salary mandatory in Cyprus?

No. No law requires it. It is a strong custom, paid in December, and most local candidates expect it. Once it is written into the contract or a collective agreement, or has been paid regularly enough to become company practice, it is part of pay and cannot be removed without consent. State clearly in every offer whether the annual figure includes it.

### What is the minimum wage in Cyprus in 2026?

From 1 January 2026 the national minimum wage is €979 gross a month on hiring and €1,088 after six months of continuous employment with the same employer. It applies to full-time employees. Some occupations, such as hotel staff, are covered by separate orders, and domestic, agricultural and shipping workers are excluded.

### What is the social insurance cap in Cyprus for 2026?

Maximum insurable earnings are €68,904 a year, which is €5,742 a month or €1,325 a week. Social insurance, the Redundancy Fund and the training levy are not charged on pay above it. The General Healthcare System has its own higher limit of €180,000, and the Social Cohesion Fund has none.

### Can I hire someone in Cyprus without setting up a company?

Yes, in two ways. An Employer of Record can employ the person for you. Or the foreign company can register directly as an employer with Social Insurance Services and run a Cyprus payroll without a local entity. The second route is cheaper but leaves all compliance, and the permanent establishment question, with you.

### What is an Employer of Record in Cyprus and what does it cost?

It is a Cyprus company that becomes the legal employer of your team member. It signs the contract, runs payroll, pays every contribution and files the returns. You direct the daily work. You pay the full employment cost plus a monthly fee per employee. Market fees vary widely with salary level and services, so get a written quote.

### How does the 50% tax exemption work for staff relocating to Cyprus?

An employee whose first employment in Cyprus pays more than €55,000 a year, and who was not Cyprus tax resident in the previous 15 years, has half of that remuneration exempt from income tax for 17 years. Contributions are still due on the full salary. The relief belongs to the employee and is applied through payroll, so collect evidence of prior residence before the first payslip.

### What notice period applies when terminating an employee in Cyprus?

After 26 weeks of service the employer's minimum notice is one week. It rises to two weeks after a year, four weeks after two years, then five, six and seven weeks, reaching eight weeks after six years. Contracts may give more. Dismissal without a lawful reason can lead to compensation of up to two years of pay, so document the grounds.

### How long can a probation period be in Cyprus?

Six months is the safe answer. During the first 26 weeks neither notice nor unfair dismissal protection applies. The older termination law allowed the parties to extend this to 104 weeks in writing, but the 2023 law on transparent working conditions limits probation to six months. Until the courts settle the overlap, treat anything longer as a risk.

### How much annual leave and how many public holidays do employees get in Cyprus?

The statutory minimum is 20 working days a year for a five-day week and 24 for a six-day week, after 48 weeks of work. Many employers give 21 or 22. There are around 14 to 15 public holidays, several of which follow the Orthodox calendar and move each year. Whether they are paid depends on the contract or on practice, and in office roles they almost always are.

### How are benefits in kind taxed in Cyprus?

A benefit with personal value, such as a company car, housing, school fees or private medical cover, is treated as employment income. It is valued, added to the payslip and taxed through payroll, and contributions normally apply to it as well. Valuation rules differ by benefit, so have each one reviewed before it is promised in an offer letter.

### Can an employee work remotely from Cyprus for a foreign employer?

Yes, but it is not free of obligations. A person living and working in Cyprus is normally insured in Cyprus, so the foreign employer must register with Social Insurance Services and pay contributions, or use an Employer of Record. The employee becomes Cyprus tax resident and taxable on the salary. The employer should also check whether that person's role creates a permanent establishment.

### When are social insurance contributions due in Cyprus, and what is the penalty for paying late?

Contributions for a month are due by the end of the following month, paid online to Social Insurance Services. Income tax withheld follows the same timetable. Late contributions attract a surcharge that published guidance puts at 3% for the first month, rising by three points each month to a maximum of 27%. Directors can be personally exposed for persistent arrears.

### Can I use contractors instead of employees in Cyprus?

Only if they are truly independent. Someone who works fixed hours, for one client, under your direction and with your equipment is likely to be an employee whatever the contract says. If the authorities reclassify the relationship, you owe both employer and employee contributions for the whole period, with surcharges, and the person gains leave, notice and redundancy rights. For a long-term full-time role, employ.

## Contact

Aqualis Ltd, https://www.aqualis.com.cy