Worker salaries are protected under both national and EU legislation. Employers must pay employee salaries regularly and without deductions; they must also keep relevant records.
The minimum wage is set at €1000 gross. More specifically, every employee who works full-time must receive an initial monthly wage of at least €1000 gross. Employees who either before January 1, 2024 or after January 1, 2024 have not completed six (6) months of continuous employment with the same employer, from January 1, 2024 must receive a monthly salary of at least €900 gross for full-time work, until completion six (6) months of continuous employment.
Employees must contribute 22.8% on their insurable earnings; contributions are divided between the employer, the employee and the state in the proportion of 8.8%, 8.8% and 5.2%, respectively. The self-employed must contribute 21.8% on their insurable income; 16.6% of which is paid by the self-employed and 5.2% by the state.
Voluntary contributors owe 19.7% on their declared earnings, 15% of which is paid by the voluntary contributor and 4.7% by the state. Voluntary contributors working abroad for Cypriot employers pay contributions of 17.6% on either their basic insurable earnings or on their normal earnings, as agreed in their contract of employment, up to the maximum insurable earnings. An additional contribution of 5.2% is paid by the state.
Cyprus social insurance provides several benefits, such as maternity allowance, sickness allowance, unemployment allowance, pension, widow’s pension, orphan’s allowance, and allowances for industrial accidents and occupational diseases.
In addition, employers must contribute 1.2% to the Redundancy Fund, 0.5% to the Human Resources Development Fund and 2% to the Social Cohesion Fund for their employees.
Every employer is obliged to register in the Register of Employers of the Social Insurance Services (SIS); before recruiting personnel. To register as an employer the YKA 01-001 application form must be filled in and submitted to the local Social Insurance District Office. A bilingual sample of the form – for guidance purposes – can be downloaded here.
After registration, the employer is notified of its registration number, which is used both for the purpose of paying contributions and in every communication of the employer with the SIS.
Each employer notifies the Social Insurance Services of each employee recruitment no later than one (1) day before recruitment. It is noted that the notification of new hires will be made only electronically through the Information System “ERGANI“, which can be found on the website https://ergani.mlsi.gov.cy.
It should be noted that as of September 13, 2021, the issue and use of the “Declaration for the recruitment ” is abolished.
The employer must contribute to various funds on behalf of the employee: social insurance, annual leave, redundancy, human resource development and social cohesion. The employer may however be exempt from contributing to the Central Holiday Fund. The employer must pay into the previously mentioned funds by the end of the calendar month which follows the month for which contributions are due. The related applications are available here and you can find billingual (Greek-English) samples that can guide you on how to fill them out here.
The Human Resources Development Authority assists people to enter the market and helps them with professional development. It also provides benefits (subsidies) to employers who take on the long-term unemployed or young people with little or no experience.
Registering as a self-employed professional is a much simpler and quicker process compared to incorporating your business as a company.
The application form should be accompanied by a copy of your ID card, passport or alien registration certificate (ARC).
The social insurance number is usually given within 1-2 weeks of submission of the application.
Self-employed professionals are liable to be taxed under three taxation categories:
a) Social insurance contributions for self-employed individuals
- The social insurance rate for self-employed professionals is 16.6% of estimated earnings;
- The estimated earnings are calculated by the Tax Department based on each individual’s experience and field of work;
- You can file a request to be taxed based on actual earnings instead;
- Social insurance contributions must be paid every three months;
- Social insurance contributions now include a contribution to the National Health System.
The EURES portal provides more information about social insurance contribution rates, as well as informative guides and brochures. If you are self-employed, you can find relevant application forms here.
b) Personal income tax
- You must submit an IR1 (tax return) form every year, regardless of the amount you actually make;
- You must acquire a Taxpayer Identification Code (TIC) from the Ministry of Finance;
- Various exemptions / deductions to your taxes may apply;
- Income tax is payable annually in two installments in July and December;
- If your annual income exceeds €70,000, then you must submit audited financial statements.
For more information about personal taxation, visit the Your Europe portal.
c) Value added tax (VAT)
- Registering for VAT is optional when you first register as self-employed, but you must register if, in any period of 12 consecutive months the turnover of your business activity exceeds €15,600;
- VAT is payable every three months;
- The rate for most goods and services is 19%. For certain types of transactions and industries, different VAT rates apply (9%, 5% or even 0%).
For more information about VAT, see “Registering for income tax and value added tax (VAT)”.
The Civil Registry and Migration Department (CRMD) issues and renews residence permits to all non-Cypriots who are either self-employed or employed by legal persons in Cyprus.
EU citizens may enter the Republic without an employment contract and search for work for a period of four months before applying for a Registration Certificate for EU citizens (form MEU1A) at the CRMD (for Nicosia district residents) or at the immigration offices of the local district police (for residents of all other districts).
The process for securing a Registration Certificate, which if approved is issued immediately, is the following:
- Fill in application MEU1A;
- Present an original identity card or passport;
- Present confirmation of engagement by the employer (Part III of the MEU1A) or certificate of employment for employed activity or certificate of registration at the Social Insurance Services as self-employed;
- Pay the application fee (€20) for yourself and €20 for every family member who is also a citizen of an EU member state.
Please note that photographs are now taken during the application process at CRMD and the district immigration offices, so you do not need to supply them yourself.
In cases where companies established in an EU Member State wish to post a number of workers for some time (e.g. 3 months, a year), but not permanently, to another member state of the EU to provide services (e.g. perform a contract, undertake machinery installation, complete part of a project, undertake a whole project until completion) a specific EU law exists which provides for that. It has been transposed into national law, namely “The Posting of Workers in the Framework of the Provision of Services Law” (No.63(I) of 2017), as periodically amended.
As per the provisions of section 4 of the law:
“The national law applies to enterprises established in a Member State which, in the context of the trans-national provision of services, post workers, in accordance with the provisions of the law (section 4, subsection (2)), article 4, to the territory of the Republic. Eligible enterprises – other cases are also defined in the law’s section – can send one (1) or more employees, on their behalf and under their direction, to the territory of the Republic, for the purpose of performing a contract concluded between the enterprise posting the employee and the recipient of the provision of services carrying out its activities in the Republic, provided that there is an employment relationship between the enterprise undertaking the project and the employee(s) at the time of posting.”
The Terms of Employment must comply with section 7 of the law.
In terms of documentation, the pertinent law –– provides in Article 11 (section) the following:
- A written statement containing the following information:
(i) The name or business name of the enterprise/corporation, its registered office, address and legal form;
(ii) the details of the legal representative of the enterprise, as well as the details of the representative of the enterprise in the Republic, if such a representative exists, during the provision of services;
(iii) the address of the place or places where the posted workers will carry out their work, as well as the name or business name, registered office, address and legal form of the enterprise or enterprises to which the posted workers will carry out their work;
(iv) the starting date of the provision of services and the posting of workers and their probable duration; and
(v) the nature of the activity carried out; and
(vi) a list of the posted individuals/employees, including the name, surname, number and country of issue of the identity card and/or passport, date of birth and sex of each of them.
(2) In the event of a change in the above information, businesses are obliged to submit a supplementary statement, as the case may be, within fifteen (15) days from the occurrence of the change.
(3) Posted workers may not be employed without prior submission of the documents provided for in subsections (1) and (2) of this section (Article 11).”
In practice, for the Posting of Workers the following documents must be provided to the competent authorities in Cyprus:
- “Letter for The Posting of Employees in Cyprus” (template)
- A signed letter of “Designation of the Company’s Legal Representative in Cyprus” (template)
- Passport / ID scans for all personnel that will work in Cyprus
- A1 forms for the posted workers
Contact Details of the Competent Authority:
Department of Labour
Ministry of Labour and Social Insurance
Tel: +357 22400803, +357 400869
- The A1 form/s for the posted workers must be sent to the following email : email@example.com
Social Insurance Services
Ministry of Labour and Social Insurance
It is noted that the Social Insurance Services will be informed by Department of Labour of your request and will be expecting the A1 certificates for the posted workers.