Establish your presence globally with Neeyamo as we help you go beyond borders to manage your global payroll services and hire new talent in Cyprus.
Overview
Cyprus, an island country found off the southern coast of Turkey, is not only known as the playground of the Greek gods but is also known as the Island of Cats. Cyprus is a country whose population of resident cats is greater than the country’s human population. The oldest archaeological evidence of cats was found in Cyprus and dates back over 9000 years.
Cyprus is rich in more than just cats and history; it also gives organizations access to an immense talent pool. If your organization’s expansion plans require you to hire employees in Cyprus and you lack a physical entity in the country – a key requisite to hire local talent, your solution is right here: the best payroll software for large companies, Neeyamo – Payroll management services. Neeyamo's global payroll solutions provide assistance for the onboarding and management of employees in Cyprus, along with the processing of a firm's payroll accounting and tax services, handling payroll risks and controls, compliance, benefits, and more.
Facts And Stats
Capital
Nicosia
Currency
Euro (EUR)
Official Language
Greek and Turkish
Fiscal Year
1 January - 31 December
Date Format
DD/MM/YYYY
Country Calling Code
+357
Other Languages
Armenian and Arabic
Time Zone
UTC + 02:00
Global Payroll
Overview
Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity. The solution to this is - global payroll outsourcing with the help of an outsourced payroll provider such as Neeyamo.
Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll.
Payroll Taxes
Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards providing both short-term and long-term benefits for their employees.
Employee Taxes
The following are the employee payroll contributions:
- 8.80% Social Insurance
- 2.65% National Health System (NHS)
- 11.45% Total Employee Cost
The following is the bracket for employee Income Tax:
| Up to 19,500.00 EUR | 0% |
| 19,500.00 EUR - 28,000.00 EUR | 20% |
| 28,000.00 EUR - 36,300.00 EUR | 25% |
| 36,300.00 EUR - 60,000.00 EUR | 30% |
| 60,000.00 EUR and over | 35% |
Effective January 1, 2024:
Social Insurance Contribution Rates: 8.8%
Employees with Occupational Plan (no employee contribution): 4.45%
Optional Domestic Insured: 155
Optional Foreign Insured: 17.6%
Maximum Insurable Earnings:
- €1,209 weekly
- €5,239 monthly
- €62,868 annually
Employer Taxes
Effective January 1, 2024:
- Social Insurance Contribution Rates: 8.8%
- Employees with Occupational Plan (no employee contribution): 13.15%
Maximum Insurable Earnings:
- €1,209 weekly
- €5,239 monthly
- €62,868 annually
Payroll Cycle
Overview
Undoubtedly, payroll is a critical process for any organization. The pay cycle in Cyprus refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.
Frequency
In Cyprus, it is common for employees to be paid on a monthly basis.
13th Month Cycle
13th Salary, while not mandatory, it is customary to pay employees a 13th salary in December.
Global Work
Overview
An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account, prior to making a job offer to an international hire.
An EOR service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits, ensuring compliance with local tax laws and regulations.
This allows organizations to focus on collaborating with the employee in Cyprus for operational tasks, with the knowledge that they have a cost-effective solution supporting their global payroll & HR requirements, as they continue their global expansion.
HR Mandates and Practices
Minimum Wage
Effective January 1, 2024, full-time employees must receive a minimum monthly gross wage of €1000.
New employees, before or after January 1, 2024, must earn a minimum monthly gross wage of €900 for full-time work.
Overtime
All work more than the standard working hours a week is to be paid as overtime and is regulated by the employment contract or collective bargaining agreements. The maximum number of hours during a workweek is 48 and is averaged over a 4-month period.
All hours in excess of 40 hours a week are paid at an overtime compensation rate; this rate is stipulated in the employment contract or collective bargaining agreements.
Data Retention Policy
In the event, for any category of documents not specifically defined elsewhere in this Policy (and unless otherwise mandated differently by applicable law, the required retention period for such document will be deemed to be 3 Years
Work-life balance for parents and carers:
With effect from December 16, 2022,
- Every Father gets a paternity leave of 2 weeks, to be taken within the period starting from the week of birth or adoption and ending two weeks after the end of the maternity leave period.
- Every working parent with children up to the age of 8 years gets parental leave of 18 weeks for each child.
- In case of adoption, the leave can be taken after the end of the maternity/paternity leave and for eight years from the date of adoption, given that the child has not exceeded the age of 12.
- For widows or single parents, the parental leave is 23 weeks.
- The parental leave allowance is paid for six weeks until August 1, 2024, and 8 weeks from August 2, 2024, to each parent for each child.
- Employees are entitled to unpaid carers’ leave of 5 working days per year.
- Every employee is entitled to unpaid Force Majeure leave of 7 working days per year.
- Every working parent with a child up to the age of 8 years, and every carer, has the right to request flexible working arrangements for care reasons.
Hiring and Onboarding Requirements
Hiring
Under Cypriot law, it is not necessary to provide a written employment contract. A contract may be created orally between the employer and employee. However, the employer must provide the employee with specific information in writing regarding the basic terms of his or her employment. This requirement concerns both oral and written contracts under employment law. The specific information regarding the terms of employment must include:
- information about the parties’ identities;
- the workplace and the registered address of the organization;
- the position or the specialization of the employee;
- the commencement date of the contract and its duration if it is for a fixed term;
- notice periods;
- annual leave entitlement;
- all the benefits to which the employee may be entitled and the time schedule for payment;
- the usual duration of daily or weekly working hours, and
- the existence of any collective agreements governing the terms or conditions of the employment.
The above information must be given within a month from the day of hiring or signing the employment contract.
Onboarding
The following details are required during onboarding:
- Name of Candidate
- Address
- Copy of ID Card Number
- Date of Birth
- Citizenship
- Personal Identification Number
- Work Permit
- Residence Permit
Employers must inform workers in writing of the amendment for transparent and predictable working conditions while onboarding. Additional information is provided by employers within a different timeframe i.e., during the employment after onboarding, as mentioned above. The Working Conditions Law sets several minimum rights for employees.
Probation
The law provides for a fixed probationary period of 26 weeks. This period may be extended for up to 104 weeks by written agreement at the start of employment.It must be decided in each employment contract if a probationary period applies to a fixed-term employee. For fixed-term contracts of less than 26 weeks, a probationary period may not apply. However, in the case of a fixed-term contract, the employment relationship between employer and employee is governed by the terms of the contract, so all matters are subject to the contractual agreement and these must be in accordance with the law.
Leave
Public Holidays
The following public holidays are observed in Cyprus:
-
January 1 - New Year's Day
-
January 6 - Epiphany
-
March 7 - Green Monday
-
March 25 - Greek Independence Day
-
April 1 - Cyprus National Holiday
-
May 1 - Labour Day/May Day
-
June 13 - Orthodox Pentecost
-
August 15 - Assumption of the Virgin Mary
-
October 1 - Cyprus Independence Day
-
October 28 - Ochi Day
-
December 25 - Christmas Day
-
December 26 - Boxing Day
Sick Leave
Sick leave and its payment are not subject to rules except for specific areas where there are relevant regulations in place or where this is provided in the employment contract.
The social insurance legislation provides for sick pay from the 4th day of leave.
Maternity Leave
Female employees are entitled to 18 weeks of maternity leave, which is extended to 22 weeks when there are twins and 26 weeks when there are at least three births. During this time, the employee receives 72% of their salary, and it is paid by the government.
Paternity Leave
Fathers are entitled to a total of 16 weeks of paternity leave, where two consecutive weeks can be taken within 16 weeks of the birth of a child.
Other Leave
Bereavement: Employees are entitled to up to 5 days of paid leave due to the death of a direct family member.
Adoption: Employees who want to adopt a child under the age of twelve years are entitled to up to 16 continuous weeks’ leave starting from the date they begin to take care of the adopted child.
Military: Employees called to perform military service are covered by assimilated insurance (Social Insurance Services).
Annual leave: In Cyprus, paid annual leave entitlement is dependent on the number of years of employment.
The standard leave entitlement for employees who work a five-day week is 20 days per year or 24 days per year for employees who work a six-day week. entitlement for leave is outlined in the employment contract or collective agreement. Employees become eligible after 48 weeks of employment with a single employer, and the employer reserves the right to accept or deny any leave requests due to the demands of the business.
Termination
Termination
Employers can terminate a fixed-term contract for the following reasons:
- Business
- Personal
- Worker misconduct
Notice and a written explanation for the termination is required. If the reason is misconduct, a warning needs to be given, and the employee gets a chance to explain their actions.
Severance is paid, and all statutory obligations, such as paid time off, are compensated.
Notice Period
The notice period for a temporary or permanent employee is dependent on the employee’s length of employment:
- 26-51 weeks of employment: 1 week’s notice
- 52-103 weeks of employment: 2 weeks’ notice
- 104-155 weeks of employment: 4 weeks’ notice
- 156-207 weeks of employment: 5 weeks’ notice
- 208- 259 weeks of employment: 6 weeks’ notice
- 260- 311 weeks of employment: 7 weeks’ notice
- 312 weeks or more: 8 weeks’ notice
The only time a notice is not required is when the employee has committed a serious offense.
Severance Pay
The severance pay varies based on the length of employment:
- Two weeks’ severance for each year of employment up to 4 years
- 2.5 weeks of wages for each year between 5-10 years of employment
- Three weeks of wages for each year between 11-15 years of employment
- 3.5 weeks of wages for each year between 16-20 years of employment
- Four weeks of wages for each year over 20 years of employment
Visa
Overview
The Cyprus immigration system provides several options for employers of foreign nationals. Cyprus is a member of the European Union. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.
Business visitors obtain a business visa to travel to Cyprus if they are not visa-exempt based on their nationality. Business visits are limited to 90 days in 180 days and require detailed support or an invitation letter outlining the nature and duration of activities.
The main work authorization categories are the EU Intracompany Transferee (ICT) Permit, suitable for the intracompany transfer of managers, specialists, and trainees from outside the EU; and the Employment Permit for Local Hi res, suitable for locally hired employees and intracompany transfers who do not qualify for an EU ICT Permit.
Employee Background Checks
Legal and Background Checks
There are no specific restrictions or prohibitions against background checks on prior work experience and qualifications of a potential employee. Employers may ask relevant questions about the applicant’s educational background and professional training. However, questions about when education and training took place may cause age discrimination claims. In addition, all data processing for recruitment purposes (including background checks) must be in accordance with the General Data Protection Regulation (‘GDPR’), and in particular in accordance with GDPR’s principles of lawfulness, transparency, data minimization, purpose, and storage limitation.
Credit and financial background are permitted provided they do not violate data protection laws or interfere with the applicant’s right to privacy.
Last updated on September 11, 2023.
If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com
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