In short
- Employee: 8.8% social insurance and 2.65% GeSY. Employer: 15.4% on top of gross pay.
- Social insurance is charged on pay up to €5,742 a month in 2026, GeSY on up to €180,000 a year.
- Income tax: 0% on the first €22,000 of taxable income a year, then 20%, 25%, 30% and 35%.
- Minimum wage from 1 January 2026: €979 on recruitment, €1,088 after six months with the employer.
In this guide
How payroll works in Cyprus: who pays what
Every month a Cyprus employer does four things for each employee. It works out the gross pay and withholds the employee's social insurance, the contribution to GeSY, the General Healthcare System, and income tax. It adds its own contributions on top, then reports and pays all of this to two authorities by the end of the following month.
The Social Insurance Services collect social insurance, the fund contributions and, with them, the GeSY contributions on pay. The Tax Department collects the income tax withheld under the pay-as-you-earn system (PAYE), and any GeSY contribution declared in its own monthly return.
To hand the work over, see what we do each month on our page about payroll services in Cyprus.
What the employee and the employer each pay on a Cyprus salary
| Contribution | Employee | Employer | Charged on |
|---|---|---|---|
| Social insurance | 8.8% | 8.8% | Pay up to €5,742 a month |
| GeSY health contribution | 2.65% | 2.90% | Income up to €180,000 a year |
| Social Cohesion Fund | none | 2.0% | All pay, with no ceiling |
| Redundancy Fund | none | 1.2% | Pay up to €5,742 a month |
| Human Resources Development Fund | none | 0.5% | Pay up to €5,742 a month |
| Total | 11.45% | 15.4% | Pay below the ceilings |
How much is social insurance in Cyprus?
8.8% from the employee and 8.8% from the employer, which is 17.6% of gross pay, and the state adds 5.2%. The rate has applied since 1 January 2024. The law raises it in steps every five years, and the next step falls on 1 January 2029. A self-employed person pays 16.6% of income.
The ceiling on insurable earnings in 2026
Social insurance and the two capped funds are charged on pay up to €5,742 a month, which is €1,325 a week or €68,904 a year. In 2025 the yearly ceiling was €66,612. Above it these three contributions stop, and the Social Cohesion Fund and GeSY continue. The Central Holiday Fund takes a further 8% of pay up to the ceiling from an employer who is not exempt from it.
Income tax on salaries: the 2026 bands and PAYE
| Taxable income a year | Rate | Tax at the top of the band |
|---|---|---|
| €0 to €22,000 | 0% | €0 |
| €22,001 to €32,000 | 20% | €2,000 |
| €32,001 to €42,000 | 25% | €4,500 |
| €42,001 to €72,000 | 30% | €13,500 |
| Above €72,000 | 35% | €13,500 and 35% of the rest |
Taxable income is the gross pay of the year less the employee's social insurance and GeSY contributions. Contributions to pension and provident funds, life insurance premiums and medical fund contributions come off as well, and the whole group is deductible up to one fifth of income. The employer estimates the year, spreads the tax over the pay periods and withholds it from each salary.
Once a year the employee gives the employer form T.D.59 with any other income and the deductions claimed. From 2026 these include a deduction for each child and up to €2,000 for rent or mortgage interest on the main home. Up to €1,000 is deductible for green investments, and up to €500 for home insurance against natural disasters. The first three depend on family income. The Tax Department publishes a withholding tool for employers and a personal calculator on its Tax Tools site.
Half of the pay is exempt for 17 years for an employee in a first job in Cyprus who earns more than €55,000 a year. The employee must not have been tax resident in Cyprus for the 15 years before.
Each deduction with its income limit is in the guide to Cyprus income tax.
Cyprus payslip example: a gross salary of €3,000 a month
The employee has no other income and no further deductions, and the salary is paid 12 times a year.
| Line | Rate | Amount a month |
|---|---|---|
| Gross pay | €3,000.00 | |
| Social insurance | 8.8% | €264.00 |
| GeSY | 2.65% | €79.50 |
| Income tax (PAYE) | by bands | €164.63 |
| Net pay | €2,491.87 | |
| Employer's contributions | 15.4% | €462.00 |
| Total cost to the employer | €3,462.00 |
The income tax is worked out for the year. Gross pay of €36,000 less €3,168 of social insurance and €954 of GeSY leaves €31,878 of taxable income. The first €22,000 is free and the remaining €9,878 is taxed at 20%, which is €1,975.60 a year or €164.63 a month. The Tax Department's own calculator returns the same figures.
The employer's €462 consists of €264 of social insurance, €87 of GeSY, €60 for the Social Cohesion Fund, €36 for the Redundancy Fund and €15 for the Human Resources Development Fund.
We do this for you Payroll services in Cyprus payslips and returns every month
Net pay in Cyprus at five salaries in 2026
The same calculation at five levels of gross pay, for 12 payments a year and with no deductions beyond the contributions. The first line is the minimum wage. For a salary between these lines, use the Cyprus tax calculator.
| Gross a month | Social insurance and GeSY | Income tax | Net pay |
|---|---|---|---|
| €1,088 | €124.57 | €0 | €963.43 |
| €2,000 | €229.00 | €0 | €1,771.00 |
| €3,000 | €343.50 | €164.63 | €2,491.87 |
| €5,000 | €572.50 | €653.25 | €3,774.25 |
| €8,000 | €717.30 | €1,573.95 | €5,708.75 |
A salary up to €2,070 a month bears no income tax: after the 11.45% of contributions the taxable income of the year stays within the first €22,000.
For the employer the cost on top of gross pay is 15.4% up to the ceiling: €167.55 on €1,088 and €770 on €5,000. On €8,000 it is €994.91, or 12.4%, because social insurance and the two capped funds stop at €5,742.
Registering as an employer and hiring the first employee
- Enter the company in the Register of Employers of the Social Insurance Services before you recruit. The form is YKA 01-001, filed with the district social insurance office, and the company receives an employer's registration number.
- Register as an employer with the Tax Department. The company, which already has its tax number, sends the form 'Registration/Deregistration as an Employer' as a message in the Tax For All portal.
- Declare each hire in Ergani, the Ministry of Labour's online system, one day or more before the employee starts. The declaration is made electronically and in no other way.
- Collect the employee's social insurance number, tax number, form T.D.59 and bank details, and sign the employment contract.
- Run the first payroll, issue the payslip and pay the salary.
Payroll dates in Cyprus: what is filed and paid, and when
| What | Where | Due |
|---|---|---|
| Social insurance and fund contributions for the month | Social Insurance Services | End of the following month |
| Monthly employer's return and the income tax withheld | Tax Department, in Tax For All | End of the following month |
| Yearly employer's return (T.D.7) for 2025 | Tax Department, in Tax For All | 30 November 2026 |
| Yearly employer's return for 2026 | Tax Department, in Tax For All | 31 March 2027 |
| Certificate of earnings (T.D.63) to each employee | From the employer | Once a year |
| Form T.D.59 from each employee | To the employer | Once a year |
The monthly return comes before the payment, because Tax For All creates the amount due from it. An employer that withholds tax files 12 monthly returns and the yearly one. An employer with nothing to withhold, because the salaries stay under the taxable level, files the yearly return and one monthly return or more.
Income tax withheld and paid late bears 1% for each month of delay, and interest at the public default rate, which is 3.5% a year in 2026. A company that files the yearly return late pays €250, or €500 where its turnover or assets exceed €1 million. The guide to the Cyprus tax calendar lists the company's other dates.
Cyprus minimum wage, pay day and a founder's own pay
The national minimum wage from 1 January 2026 is €979 gross a month on recruitment and €1,088 after six months of continuous work for the same employer. It is a monthly figure for full-time work, and for part-time work it is reduced in proportion to the hours. Domestic workers, farm workers, seafarers and hotel staff are outside this order, and hotels have an order of their own.
Salaries are paid in euros, usually monthly and by the last working day of the month. A director who takes a salary from the company is on the payroll like any employee. A dividend is not pay: it carries no social insurance and no income tax, and it bears 2.65% GeSY. The guide to the Cyprus non-dom rules covers the owner's side.
To employ staff in Cyprus you need a Cyprus company or a registered branch, which starts with company formation in Cyprus. The books behind the payroll are part of accounting in Cyprus, and each month we run the payroll of your Cyprus company.
