Employment contracts in Cyprus are either indefinite-term or fixed-term. The duration of a fixed-term contract cannot exceed 30 months, and a series of fixed-term contracts may not have a combined term of more than 30 months. If the employee remains employed with the employer beyond the 30-month limit, the contract automatically converts to an indefinite contract. An employment contract does not have to be in writing but it is advisable. The employer must disclose some information to the employee in writing within 30 days of the start of employment if it is not stated in a written contract.

The National Minimum Wage is set at 940 EUR per month, however, for the first six months of employment it is set at 885 EUR per month.

The standard workweek in Cyprus consists of 40 hours across five days (8 hours per day), although a six-day week is possible.

Overtime

All hours worked in excess of 40 hours per week are paid at an overtime compensation rate. Overtime pay rates should be stipulated in the Employment Contract or applied in accordance with any applicable Collective Bargaining Agreement. 48 hours per week is the maximum number of hours permitted to work during a week, averaged over a 4-month period.

Employees are entitled to paid sick leave from the fourth day of sickness, paid for by Social Security. The employee must submit a medical certificate to the Social Security Administration within 48 hours of the start of the sick leave. The social insurance covers sick pay up to a period of 312 days at 60% of salary (the % of salary might increase where there is a dependent spouse and children).

Maternity Leave

Female employees are entitled to 18 weeks of maternity leave for the birth of their first child, 22 weeks maternity leave for the birth of their second child and 26 weeks maternity leave for the birth of all subsequent children. It is compulsory to take 11 weeks of maternity leave and are generally taken 2 weeks before the due date and the remainder after.

The amount of the maternity allowance is determined based on the weekly average of actual and simulated insurable earnings of the insured within relevant tax year. The maternity allowance includes a basic allowance and a supplementary allowance. The weekly amount of the basic allowance is equal to 72% of her salary, rising to 80%, 90% or 100%, when the beneficiary has one, two or three dependents, respectively. If the beneficiary receives part of her earnings from her employer for the period she is entitled to maternity benefit, the benefit is reduced so that the sum of the allowance and emoluments she receives not to exceed her full emoluments.

The application for maternity benefit must be submitted within 21 days of the day from which the allowance is required. Submitting the application for maternity allowance takes place immediately after completing the twenty-fifth (25th) week of pregnancy. Workers must also inform their employers of pregnancy in advance and provide a medical certificate which indicates the expected due date.

Paternity Leave

Fathers are entitled to 2 consecutive weeks of paid paternity leave within the 16 weeks following the birth of a child, paid by the Social Insurance Fund at 75.20% of the employee’s regular salary.

Parental Leave

The right to parental leave covers all employees who have children under the age of 8. According to the law, every eligible employee can take unpaid parental leave of up to eighteen weeks for each child.

The standard leave entitlement for employees who work a five-day week is 20 working days per year and for employees who work a six-day week is 24 working days per year. Additional annual leave days might be mandated within the Employment Contract or applicable Collective Bargaining Agreement. Entitlement for annual leave is once 48 weeks have been worked with a single employer.

It is permitted to carryover unused leave days providing there is mutual agreement to do so from both the employer and employee, capped at the maximum number of days of leave that an employee can accrue over 2 year period (i.e. 40 or 48 days).

An employee’s wages during the annual leave period is paid either by the employer directly or by the Central Holiday Fund.

Depending on collective bargaining agreements or the employment contract, an employee may be allowed additional leave types.

Bereavement: Employees are entitled to up to 5 days of paid leave due to a 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).

Public holidays that fall on the weekend are usually lost.

Date-Day-Holiday

1 Jan 2023-Monday-New Year’s Day
6 Jan 2023-Saturday-Epiphany
18 Mar 2024-Monday-Green Monday
25 Mar 2024-Monday-Greek Independence Day
1 Apr 2024-Monday-National Day
1 May 2024-Wednesday-Labour Day
3 May 2024-Friday-Good Friday
6 May 2024-Monday-Easter
7 May 2024-Tuesday-Easter
24 Jun 2024-Monday-Whit Monday (Pentecost)
15 Aug 2024-Thursday-Assumption Day
1 Aug 2024-Tuesday-Cyprus Independence Day
28 Oct 2024-Monday-Ochi Day
25 Dec 2024-Wednesday-Christmas Day
26 Dec 2024-Thursday-Boxing Day

Cyprus has universal health care. Cyprus also has many private clinics and hospitals. Private medical insurance is available, and many residents of Cyprus purchase it.

Employers can terminate employment according to lawful justified reasons including unsatisfactory performance, redundancy, force majeure, termination at the end of a fixed period, commission of a serious disciplinary or criminal offence, indecent behavior, or repeated violation of employment rules.

Employers can terminate a fixed-term contract for reasons related to business needs, personal reasons or worker misconduct.

Notice and a written explanation for the termination are 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 weeks’ 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

No notice is required during the probation period or when the employee has committed a serious offense.

Severance Pay

The severance pay varies based on the length of employment:

• 2 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

• 3 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

• 4 weeks of wages for each year over 20 years of employment

Probation Period

The probationary period in Cyprus is dependent on the type of role and is stipulated within the employment agreement. In general, probation periods are between six months and two years.

Employer Payroll Contributions

8.80% - Social Insurance (applied on salary up to 62,868 EUR annually)
2.00% - Social Cohesion Fund
1.20% - Severance Fund (applied on salary up to 62,868 EUR annually)
0.50% - Training and Development (applied on salary up to 62,868 EUR annually)
2.90% - National Health System (GESY) (applied on salary up to 180,000 EUR annually)
15.40% - Total Employment Cost

Employee Payroll Contributions
8.80% - Social Insurance (applied on salary up to 62,868 EUR annually)
2.65% - National Health System (GESY) (applied on salary up to 180,000 EUR annually)
11.45% - Total Employee Cost

Employee Income Tax
0.00% - Up to 19,500.00 EUR
20.00% - 19,500.00 EUR – 28,000.00 EUR
25.00% - 28,000.00 EUR – 36,300.00 EUR
30.00% - 36,300.00 EUR – 60,000.00 EUR
35.00% - 60,000.00 EUR and over

Payroll Cycle

The payroll cycle in Cyprus is generally monthly and payments are to be made no later than the last working day of the month.

13th Salary

Whilst not mandatory, it is customary to pay employees a 13th salary in December.

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 within 180 days and require a detailed support or 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 Hires, suitable for locally hired employees and intracompany transfers who do not qualify for an EU ICT Permit.

The standard rate is 19%.