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How to hire and pay employees in Cyprus
Slasify
Jun 21, 2025
| Key Takeaways |
|---|
| 1 Cyprus offers a strategic Mediterranean hub with a robust economy, business-friendly environment, and skilled workforce, making it ideal for growth in Europe and beyond. |
| 2 Employers must comply with Cyprus payroll, tax, and contribution systems, including progressive personal income tax up to 35% and statutory employer/employee contributions for social insurance and health plans. |
| 3 Wages must be paid at least monthly or weekly depending on employment type, with maximum intervals for piece-rate payments of 16 days. |
| 4 The national minimum wage is EUR 1,000 per month (EUR 900 for new hires under 6 months), with no statutory 13th/14th month bonus unless agreed. |
| 5 Terminations require written notice based on length of service (up to 8 weeks) and may involve severance pay, with special rules for unjust dismissals or force majeure events. |
| 6 Standard working hours are capped at 48 hours per week on average, with mandated breaks, weekly rest periods, and regulated overtime agreements. |
| 7 Employees receive 4 weeks of paid annual leave plus 16 public holidays. Holiday pay may come from the Central Holiday Fund or directly from the employer. |
| 8 Cyprus provides family leave protections, including maternity (up to 26 weeks), paternity (2 weeks), parental (18–23 weeks), adoption, prenatal care, and emergency leave options. |
| 9 Probation periods cannot exceed 6 months. Fixed-term contracts have proportional probation limits and require no new probation upon renewal. |
| 10 For seamless hiring, payroll, compliance, and EOR support in Cyprus, Slasify provides end-to-end HR solutions across 150+ countries, ensuring regulatory accuracy and operational efficiency. |
Discover the global hiring and employment landscape in Cyprus – a strategic Mediterranean hub with a robust economy and a business-friendly environment. With its attractive tax regime and skilled workforce, Cyprus is an excellent destination for companies seeking growth opportunities in Europe and beyond.
Personal Income Tax
| Taxable Income (EUR) | Progressive Tax Rate (%) |
|---|---|
| Up to 19,500 | - |
| 19,501–28,000 | 20 |
| 28,001–36,300 | 25 |
| 36,301–60,000 | 30 |
| Over 60,000 | 35 |
Local Tax
There are no local taxes on employment income in Cyprus.
Statutory Contributions
The contributions made for Social Insurance, Surplus Staff Fund, Human Resources Development Fund and Central License Fund are calculated based on the employee's salaries of up to EUR 62,868 per year.
On the other hand, contributions for the General Health PLan (GeSY) are calculated based on the employee's salaries of up to EUR 180,000 per year.
Employer Contributions
| Contribution rate | |
|---|---|
| Central Holiday Fund | 8% |
| General Health Plan (GeSY) | 2.9% |
| Human Resources Development Fund | 0.5% |
| Redundancy Fund | 1.2% |
| Social Cohesion Fund | 2% |
| Social Insurance | 8.8% |
Employers who provide annual leave pay under more favorable terms than those provided under the established Law may apply to be exempted from making contributions to the Central Holiday Fund.
Alternatively, those offering more than 4 weeks of annual leave shall be required to pay an increased contribution to the Central Holiday Fund.
Employee Contributions
| Contribution rate | |
|---|---|
| General Health Plan (GeSY) | 2.65% |
| Social Insurance | 8.8% |
Payment of Wages
Employees who are paid on a monthly basis must be paid at least monthly, while other employees must be paid must be paid at least weekly.
The maximum intervals for wage payments to employees who are paid by piece or proportionately to production must be such so that wages are paid at least twice a month, at intervals of not exceeding 16 days.
Minimum Wage
Effective January 1, 2024, minimum wage in Cyprus is set at EUR 1,000 per month. However, a lower minimum wage of EUR 900 per month may apply for new hires, i.e. those who have not completed 6 months of continuous employment.
Statutory Bonus
There are no legal provisions that would require private employers to pay any 13th and/or 14th month salaries to their employees unless they are covered under a collective or individual agreement between the relevant parties, or they are part of the employer's existing practice.
Termination
The employer or employee intending to terminate their employment relationship shall give the other party a written notice before commencing any required notice period.
Generally, employers can summarily dismiss employees for serious misconduct, for repeated violation or disregard of work regulations, or for committing a criminal offense in the course of their duties.
| Reasons justifying the employee's dismissal without notice | Reasons justifying the employee's dismissal without severance |
|---|---|
| The employees' conduct is such that it makes it impossible for the employer-employee relationship to continue | Employee fails to perform their work reasonably satisfactorily |
| A serious offense is committed by the employee in the course of their duties | Employee has become redundant, though they may be entitled to receive a redundancy pay instead |
| A criminal offense is committed by the employee in the course of their duties without the employer's consent | Employee is terminated due to force majeure, act of war, civil insurrection, act of God or destruction of the premises by fire not due to the willful act or negligence of the employer |
| Improper behavior or conduct by the employee in the course of their duties | Employee is terminated at the end of a fixed-term contract or due to the employee reaching the normal retirement/pensionable age |
| Serious or repeated violation or disregard of work regulations or other rules by the employee in relation to the employment | Employee exhibits such conduct as to render themselves subject to dismissal without notice. |
The employee who feels that their termination was illegal can proceed to file a case with the Industrial Disputes Court.
Notice Period
In the event that an employee or employer wishes to terminate the employment relationship, the following notice period must be observed:
| Length of service | Notice period for the employer | Notice period for the employee |
|---|---|---|
| Up to 26 weeks | - | - |
| 26–51 weeks | 1 week | 1 week |
| 52–103 weeks | 2 weeks | 2 weeks |
| 104–155 weeks | 4 weeks | |
| 156–207 weeks | 5 weeks | |
| 208–259 weeks | 6 weeks | |
| 260–311 weeks | 7 weeks | 3 weeks |
| Over 311 weeks | 8 weeks |
A dismissed employee serving their notice period shall be entitled to up to 8 hours of paid leave per week to seek new employment, provided that the total time taken for this purpose does not exceed 40 hours.
Severance Pay
Employees with at least 26 weeks of continuous service shall be entitled to a severance as determined by the Labor Disputes Court if they have been unjustly dismissed. The amount of severance determined by the Court shall not exceed 2 years' wage, and shall not be less than the established redundancy pay.
The severance to which the employee is entitled to is paid as follows:
| Amount | Payment of severance |
|---|---|
| Up to the employee's daily wages for a year | By the employer |
| The amount that exceeds the daily wages of the employee for a year | From the Redundancy Fund |
Note: When an employee legally terminates their employment due to the employer's conduct, such termination shall also entitle the employee to this severance.
Probationary Period
The duration and conditions of a probationary period may be included in an employment contract, and they cannot last longer than 6 months.
In the case of fixed-term employment, the length of the probationary period should be proportionate to the expected duration of the contract and the nature of the work, but cannot last longer than 6 months. In the event that the fixed-term contract is renewed, a new probationary period shall not be required.
No notice shall be required if, during or at the end of the probationary period, either party decides that the employment should not be continued.
Work Time Rules
Standard Working Hours
An employee's total working hours, including overtime, shall not exceed an average of 48 hours per week over a 4-month reference period.
Break Period
Employees whose working days are longer than 6 hours shall be entitled to at least 15 continuous minutes of rest break, during which they can leave their work station.
The employee's break time shall not be taken consecutive with the commencement or the end of their workday.
Furthermore, employees who have returned from their maternity leave shall be entitled to, in the 9-month period after their return, take a one-hour break during the workday for breastfeeding purposes. Alternatively, these employees can also either arrive at work an hour later or leave work an hour earlier.
The one-hour period used for breastfeeding purposes shall be considered and paid for as working time.
Overtime
The performance of overtime work shall be regulated by either collective or individual agreements between the concerned parties, provided that the maximum weekly working hours are respected.
Weekly Rest Days
Employees shall be entitled to a minimum daily rest period of 11 consecutive hours per 24-hour period and a minimum weekly rest period of 24 consecutive hours per week.
Employees may be required to work on their weekly rest periods only if it is justified by objective, technical or work organization reasons. Furthermore, the employee's right to weekly break must still be maintained by either giving them a continuous rest period of 48 hours over a 14-day period or 2 rest periods of 24 consecutive hours in a 14-day period.
Holiday and Leave Entitlements
Public Holidays
Public holidays are regulated by agreements between employers and employees or by collective agreements. There are 16 days of public holidays in Cyprus.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Epiphany | January 6 |
| Clean Monday | March 18 |
| National Holiday | March 25 |
| National Anniversary | April 1 |
| Labor Day | May 1 |
| Good Friday | May 3 |
| Easter Sunday | May 5 |
| Easter Monday | May 6 |
| Pentecost | June 24 |
| Dormition of the Virgin | August 15 |
| Cyprus Independence Day | October 1 |
| No Day | October 28 |
| Christmas Eve | December 24 |
| Christmas Day | December 25 |
| Feast of the Virgin Mary | December 26 |
Annual Leave
Employees that have worked 48 weeks within a year shall be entitled to at least 4 weeks of paid annual leave, while those who has worked less than 48 weeks within the year shall have their annual leave be prorated accordingly.
The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated. However, annual leave may be accumulated for a period of 2 years after an agreement between the relevant parties.
Annual leave pay shall either be paid directly by the employer or out of the Central Holiday Fund, established for this purpose under the law and to which employers are obliged to pay contributions.
| Annual leave pay from the employer | Annual leave pay from the Central Holiday Fund |
|---|---|
| Employers offering paid annual leave under more favorable terms than those provided by the Annual Holiday with Pay Law may apply to be exempted from contributing to the Central Holiday Fund, in which case they are obligated to pay their employees directly for their annual leave | The amount payable to every employee out of the Central Holiday Fund is equal to the corresponding contributions paid by the employer during the previous year, even if the leave was not consecutive. |
To receive payment for the annual leave from the Central Holiday Fund, the employee must take 9 consecutive days of annual leave. If the employee worked less than 48 weeks within the previous year, the period of leave must include at least 4 consecutive days.
Note: An employee who worked for less than 13 weeks within the previous year shall not be entitled to any payment out of the Central Holiday Fund.
Sick Leave
The duration of sick leave and whether or not it is remunerated is a matter of agreement between the employer and the employee, either through collective or individual agreements, or based on the employer's existing practice.
In the absence of any agreement, the employer is not obligated to supplement the sickness benefit paid by the Social Insurance Services.
Maternity Leave
Employees shall be entitled to 22 consecutive weeks of maternity leave, of which 11 weeks must be taken in the period that begins 2 weeks before the expected date of delivery.
| Circumstance | Maternity leave entitlement |
|---|---|
| Birth does not occur within the week in which it is expected | The pre-natal leave period shall be extended until the birth actually occur without affecting the compulsory leave period after childbirth |
| Birth occurs earlier than the expected week of delivery | The remainder of the maternity leave is granted after delivery to ensure that the employee enjoy their full maternity leave entitlement |
Furthermore, the employee's entitlement to maternity leave shall increase with the number of children they have, as follows:
| Number of children | Maternity leave |
|---|---|
| Up to 2 children | 22 weeks |
| 3 or more children | 26 weeks |
In the case of childbirth resulting in the birth of more than one child, the right to maternity leave is extended by 4 weeks for each additional child from the same birth.
The employee is obligated to present a certificate from a registered doctor stating that they are expecting to give birth and the week in which the birth is expected.
Note: In the event that the child is hospitalized immediately after birth, the employee may be entitled to extend their maternity leave in accordance with the provisions of the Maternity Protection Act.
Paternity Leave
Employees whose partner gave birth, had a child through a surrogate mother or adopt a child of up to 12 years old shall be entitled to 2 weeks of paternity leave.
The employee is obligated to notify their employers in writing of their intention to take paternity leave 2 weeks in advance.
In the event that the mother dies before or during childbirth, or during maternity leave, the right to paternity leave shall be increased by as many weeks as the remaining weeks of maternity leave that the mother would have been entitled to.
Parental Leave
Every working parent who has a child up to 8 years old and has completed 6 months of continuous employment has the right to take 18 weeks of parental leave. The duration of this leave shall be extended to 23 weeks for widowed parents or, in cases of loss of custody or non-recognition of the child by the other parent, single parents.
| Parental leave for employees with a child with disability | Parental leave for parents who adopt their child |
|---|---|
| The leave shall be granted until the child is 18 years old | The leave shall be granted for a period of 8 years from the date of adoption instead of the date of birth, provided that the child is not over 12 years old |
In any case, the minimum duration of parental leave use is 1 day and the maximum duration is 5 weeks per calendar year. To take this leave, the employee must give the employer a 3-week notice before the intended date of the leave.
The employer does not have the right to reject parental leave request, but they can postpone the taking of parental leave to a later time not exceeding 2 months from the date of submission of the parental leave request.
Other Leave
| Leave | Paid/Unpaid | Duration | Note |
|---|---|---|---|
| Adoption Leave | Unpaid | 20 weeks |
For employees adopting a child under 12 years old, replacing their right to maternity leave. In case the adoption concerns the acquisition of a 3rd and subsequent children, the period of leave shall be extended to 24 weeks. |
| Pre-natal Care Leave | Paid | - | For pregnant employees to get pre-natal examinations, provided that such examinations need to be carried out during working hours. |
| Carer's Leave | Unpaid | 5 working days per year | For employees who are responsible for providing personal care to a relative or a person residing in the same household due to a serious medical reason. |
| Emergency Leave | Unpaid | 7 working days per year | Can be taken for reasons of force majeure related to urgent family reasons involving illness or accident. |
Employees intending to adopt a child are obligated to notify their intention to adopt to the Social Welfare Services.
Moreover, their right to adoption leave is provided on the understanding that they will notify their employer in writing of their intention to adopt a child and the date the child will be adopted at least 6 weeks in advance.
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