Employment in Cyprus is governed by a set of separate laws covering annual leave, termination, maternity and parental leave, with collective agreements playing a large role in many sectors. Here is what employers need to know about leave, pay, tax, social insurance and ending employment.
Statutory minimums come from the Annual Holidays with Pay Law, the Protection of Maternity Law and the 2022 law on paternity, parental and carer’s leave. Collective agreements and contracts can give more. Maternity and paternity pay is provided by the Social Insurance Services, not the employer.
Working days a year for a 5-day week (24 days for a 6-day week), for employees who work at least 48 weeks in the leave year.
11 weeks are compulsory, starting 2 weeks before the week of the expected birth. 26 weeks for a third or later child, plus 4 weeks for each extra child in a multiple birth.
Taken in one block, from the week of the birth or adoption until 2 weeks after the end of the mother’s maternity leave.
Per parent for each child, after 6 months with the employer. Part of it is covered by a parental leave allowance from Social Insurance.
There is no general legal requirement for private employers to pay sick leave. Employees who are unable to work receive sickness benefit from the Social Insurance Services, and many collective agreements and contracts provide paid sick days on top.
Set up each Cypriot leave type in IceHrm with its own accrual, carry forward and approval rules, including different entitlements for 5-day and 6-day working weeks. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
Cyprus introduced a national minimum wage in 2023. It is set by ministerial decree and was last raised from 1 January 2026. Collective agreements set higher rates in many sectors.
For full-time work after 6 months of continuous employment with the employer, from 1 January 2026.
The lower monthly rate that can apply during the first 6 months of employment.
Including overtime, under the working time rules. Normal hours, often 38–40 a week, are set by contracts and collective agreements.
General labour law does not set an overtime premium for the private sector. Overtime rates are set by the applicable collective agreement or the employment contract, so check what applies to each role.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so overtime is paid at the rates in your collective agreement or contracts and weekly hours stay visible. Time & attendance →
Tax residents pay income tax on their worldwide income. Employers deduct tax from salaries under the pay-as-you-earn (PAYE) system, along with the employee’s social insurance and health contributions. New, wider tax bands apply from 1 January 2026.
| Chargeable income | Rate | Tax on lower bands |
|---|---|---|
| €0 – €22,000 | 0% | €0 |
| €22,001 – €32,000 | 20% | €0 |
| €32,001 – €42,000 | 25% | €2,000 |
| €42,001 – €72,000 | 30% | €4,500 |
| €72,001 and over | 35% | €13,500 |
Employers pay social insurance and several other fund contributions on top of gross salary, and withhold the employee’s share from pay.
Social insurance, redundancy, training, social cohesion and General Health System (GHS) contributions combined.
8.8% social insurance and 2.65% GHS, withheld from gross pay.
Payable by employers that are not exempt from the fund, for example because they run their own approved leave arrangements.
| Contribution | Employer | Employee |
|---|---|---|
| Social insurance fund | 8.8% | 8.8% |
| General Health System (GHS) | 2.9% | 2.65% |
| Social cohesion fund | 2.0% | – |
| Redundancy fund | 1.2% | – |
| Training development fund | 0.5% | – |
| Total | 15.4% | 11.45% |
Build Cypriot pay the way you already structure it, with your own salary components, deductions and formula columns, such as a capped social insurance or GHS column. Want to know how well IceHrm handles payroll calculations for Cyprus? Contact us or see Payroll →
Under the Termination of Employment Law, employees who have worked continuously for 26 weeks (or a longer agreed probation period) are protected against unfair dismissal. A dismissal must have a valid reason, such as poor performance, redundancy, serious misconduct or the end of a fixed-term contract.
| Continuous employment | Notice |
|---|---|
| 26 to 51 weeks | 1 week |
| 52 to 103 weeks | 2 weeks |
| 104 to 155 weeks | 4 weeks |
| 156 to 207 weeks | 5 weeks |
| 208 to 259 weeks | 6 weeks |
| 260 to 311 weeks | 7 weeks |
| 312 weeks or more | 8 weeks |
Employees made redundant after qualifying service receive redundancy pay from the Redundancy Fund, which is financed by the employer’s 1.2% contribution. A remaining period of 26 weeks or more counts as a full year.
| Years of continuous employment | Pay per year |
|---|---|
| Years 1 to 4 | 2 weeks |
| Years 5 to 10 | 2.5 weeks |
| Years 11 to 15 | 3 weeks |
| Years 16 to 20 | 3.5 weeks |
| Years 21 to 25 | 4 weeks |
For an unfair dismissal, the Labour Disputes Court awards compensation of at least the redundancy pay amount and at most 2 years’ wages. The employer pays up to 1 year’s wages and the Redundancy Fund covers any excess.
The dates below are the main public holidays in Cyprus. Several follow the Orthodox calendar, so their dates change each year. In the private sector, which holidays are paid days off is largely set by collective agreements and employment contracts.
Leave groups give each office its own holiday calendar, so you can set the exact holidays your Cyprus contracts or collective agreement grant, including the moving Orthodox dates each year. Holiday calendars →
Employers must give employees written information about the essential terms of their employment. A written contract is the usual way to do this and helps avoid disputes.
The standard probation period is 26 weeks. It can be extended up to 104 weeks, but only by written agreement made when employment starts. During probation, either party can end the employment without notice, and the burden is on the employer to show the employee was on probation.
Send contracts and written terms for e-signing, store them on the employee’s record, and track onboarding with task lists so registrations and probation reviews aren’t missed. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Cyprus, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Cyprus? Talk to us.
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