Easily manage employment in Cyprus

Payroll services in Cyprus

Cyprus has a strong economy with key industries in tourism, shipping, and financial services. With specific labor laws and tax regulations, employers in Cyprus must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Cyprus

Employers in Cyprus must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: Cyprus’s minimum wage is EUR 1,000 per month.
• Payroll frequency: Salaries are generally paid monthly.
• Standard working hours: The normal workweek in Cyprus is 40 hours, typically spread over five days.
• Overtime: Employees are entitled to additional pay for overtime work, calculated at 150% of the regular wage for extra hours and 200% for work on public holidays.

Taxation and social security contributions

• Personal income tax: Cyprus has a progressive income tax system with rates ranging from 0% to 35% depending on income levels.
• Employer contributions:
• Social insurance: 8.3% of the gross salary.
• Redundancy fund: 1.2% of the gross salary.
• Industrial training levy: 0.5% of the gross salary.
• Social cohesion fund: 2% of the gross salary.
• Employee contributions:
• Social insurance: 8.3% of the gross salary.
• Corporate tax: The corporate income tax rate in Cyprus is 12.5%.
• Tax reporting: Employers must file payroll taxes and contributions with the Cypriot Tax Department regularly.

Payroll compliance in Cyprus

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security and income tax.
• Employers must stay updated on changes to Cyprus’s labor laws and tax regulations to avoid penalties.

Quick facts: Important considerations for employers

• Payroll frequency: Salaries are generally paid monthly.
• Currency: Payroll in Cyprus is processed in Euros (EUR).
• Tax reporting: Employers must file payroll taxes and contributions with the Cypriot Tax Department.
• Payroll deductions: Employers must ensure accurate deductions for social security and income tax.
• Payroll compliance: Employers must stay updated on changes to tax rates and reporting requirements.

Run payroll in Cyprus with Remote

Managing payroll in Cyprus requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.