Guide
What an employee costs an employer in Cyprus (2026)
Updated
Cyprus employer contributions span five funds. Together they add roughly 15% to salary at typical pay, and the share falls as pay passes the insurable earnings ceiling.
Talk to a specialist Gross, contributions, tax and net, itemised on 2026 rates.
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How this calculator works
- Income tax uses the bands in force from the 2026 tax year: 0% to €22,000, 20% on €22,001–€32,000, 25% on €32,001–€42,000, 30% on €42,001–€72,000 and 35% above €72,000. Until the 2025 tax year the threshold was €19,500 and the top rate started at €60,001 (Cyprus Tax Department, Tax Reform 2026).
- Employee social insurance is 8.8% of insurable earnings, matched by the employer, with the state adding 5.2% to make 22.8% in total (Business in Cyprus, Republic of Cyprus).
- Insurable earnings are capped. For 2026 the Social Insurance Services set maximum insurable earnings at €1,325 a week, €5,742 a month and €68,904 a year for monthly-paid employees. They apply until the end of 2026 (Social Insurance Services, Basic Insurable Earnings 1981-2026).
- The General Healthcare System contribution is 2.65% for employees and 2.90% for employers, on earnings up to €180,000 a year (Social Insurance Services, Contributions).
- Social insurance, GHS and provident fund contributions are deducted before income tax. The combined deduction for contributions to funds and schemes, GHS and insurance premiums is limited to one fifth of income. That is the limit applied in the Tax Department's own 2026 employer withholding tool (form T.D.59).
- The calculator assumes a single employment with no other income, no personal deductions for children, rent, mortgage interest or the green transition, and no exemption for first employment in Cyprus. Each of those reduces tax further and is claimed on form T.D.59 or the annual return.
- Employer cost excludes the Central Holiday Fund contribution, because employers who provide annual leave directly may obtain an exemption from it. If you do not hold an exemption, add it on top.
What the employer pays
| Fund | Rate | Charged on |
|---|---|---|
| Social Insurance Fund | 8.8% | Earnings up to €68,904 a year |
| Redundancy Fund | 1.2% | Earnings up to €68,904 a year |
| Human Resources Development Fund | 0.5% | Earnings up to €68,904 a year |
| Social Cohesion Fund | 2% | Total earnings, no maximum |
| General Healthcare System | 2.90% | Earnings up to €180,000 a year |
Rates from the Social Insurance Services (Contributions), ceilings from the published maximum insurable earnings for 2026 (Basic Insurable Earnings 1981-2026).
The Central Holiday Fund
A sixth contribution, to the Central Holiday Fund, is paid in full by the employer at a rate tracking the employee's annual leave entitlement. An employer that grants leave directly may obtain an exemption from paying into the fund, and many do. So the calculator here excludes it; if you hold no exemption, add it to the figures shown.
Costs beyond the contribution rates
- The statutory minimum wage. Full-time employees must receive at least €1,000 gross a month, or €900 gross for the first six months of continuous employment with the same employer.
- A thirteenth salary, common in Cyprus contracts and treated as ordinary earnings for contributions and tax when paid.
- Provident fund contributions, where the employer runs a scheme. There is no auto-enrolment duty of the UK kind, so this is a matter of contract.
- Annual leave, sick pay cover and recruitment, which sit outside the contribution rates entirely and are usually the larger number.
Use the calculator to see employer cost and employee net pay for the same salary side by side.