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EOR IN Cyprus
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A guide to employing and growing your team in Cyprus
Fast and compliant market entry. Hire top local talent without the need for a legal entity
The Republic of Cyprus is a Mediterranean island nation nestled just off the coasts of Israel, Turkey, and Egypt. Cyprus offers a competitive labor market with a strong emphasis on professional services and a digital-first approach to labor administration. Employment is governed by the Termination of Employment Law and the Minimum Wage Decree. As of January 1, 2026, the national minimum wage is EURO979 gross per month for the first six months of employment, increasing to EURO1,088 gross per month after six months of continuous service with the same employer. These rates apply to all employees except for specific categories like domestic workers and agricultural laborers.
Employer Contributions
Social Insurance: 8.8% (Capped at EURO68,904 per annum)
Health Insurance (GeSY): 2.90% (Capped at EURO180,000 per annum)
Social Cohesion Fund: 2.0% (No salary cap)
Redundancy Fund: 1.2% (Capped at EURO68,904 per annum)
Industrial Training Fund: 0.5% (Capped at EURO68,904 per annum)
Holiday Fund: 8.0% (Employer is exempt if they provide better vacation terms directly)
Total Employer Contribution: ~15.4% – 23.4%
Employee Payroll Taxes
Social Insurance: 8.8% (Capped at EURO68,904 per annum)
Health Insurance (GeSY): 2.65% (Capped at EURO180,000 per annum)
Total Employee Contribution: 11.45%
Employee Income Tax Rates
Cyprus updated its tax-free threshold in 2026 to provide significant relief for middle-income earners.
EURO0 – EURO22,000: 0%
EURO22,001 – EURO32,000: 20%
EURO32,001 – EURO42,000: 25%
EURO42,001 – EURO72,000: 30%
Above EURO72,000: 35%
Statutory Leave
Employees are entitled to a minimum of 20 working days of paid annual leave (for a 5-day week) or 24 days (for a 6-day week) after 48 weeks of service. Cyprus observes 15 public holidays per year. If an employer contributes to the Holiday Fund, the employee’s vacation pay is distributed by the Social Insurance Department; otherwise, the employer pays the salary directly.
Pregnancy and Maternity Leave
Mothers are entitled to 22 weeks of paid maternity leave for their first or second child, and 26 weeks for a third child. Mandatory leave includes two weeks before the birth and eight weeks after. The leave is paid by the Social Insurance Fund at a rate between 72% and 100% of the salary, depending on family status.
Paternity Leave
Fathers are entitled to 2 consecutive weeks of paid paternity leave, which must be taken within 16 weeks of the child’s birth. To qualify, the father must have been employed for at least 6 months with the same employer.
Work-Related Injury Leave
Sick Leave: Social Insurance provides sickness benefits starting from the 4th day of illness (or 1st day for accidents). The amount is based on previous contributions.
Parental Leave: Each parent is entitled to 18 weeks of unpaid leave for each child under age 15. Since 2024, parents can receive a “Parental Leave Benefit” for part of this period (up to 8-14 weeks) via Social Insurance.
Bereavement/Marriage: Usually governed by individual employment contracts or collective agreements.
Termination Process
Dismissal must be justified (e.g., redundancy, misconduct, or incompetence). If terminated “without cause” after 26 weeks of service, the employee is entitled to compensation paid by the employer or the Redundancy Fund, depending on the reason. Redundancy payments are calculated based on the length of service and capped by law.
Notice Period
Statutory notice periods depend on the duration of employment:
26 – 52 weeks: 1 week
52 – 104 weeks: 2 weeks
2 – 5 years: 4 weeks
5 – 10 years: 5 weeks
10+ years: 8 weeks
Probation Period
The standard probation period is 6 months (26 weeks). This can be extended up to 104 weeks by written agreement at the start of employment. During probation, either party can terminate the contract without notice or justification.