Cyprus

Cyprus PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Cyprus to companies willing to enter the Cyprus market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Cyprus.  However our solution allows you to start the operations in Cyprus within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Cyprus fast facts

Population, million: 1,18
Land area: 9,251 km²
Capital: Nicosia
Local currency: EUR

Cyprus is situated in the eastern part of the Mediterranean Sea, about 70 km. south of Turkey, 100 km. west of Syria, 772 km. southeast of the mainland of Greece and 350 km. north of Egypt. The maximum width of the island is about 225 km. (from Cape Arnauti in the west to Cape Apostolos Andres in the northeast). The maximum ‘height’ is 97 km.

Hiring, Negotiating and Doing Business in Cyprus

Necessity of written employment contract

Although a written employment contract is not required in Cyprus, the Law Providing for an Employer’s Obligation to Inform Employees of the Conditions Applicable to the Contract or Employment Relationship 2000 (Law 100(I)/2000) imposes an obligation on the employer to provide to the employee, in writing, specific information regarding the terms of his employment. This information must include:

  • The identity of the parties.
  • The place of work and the registered address of the business.
  • The position or the specialisation of the employee.
  • The commencement date of the contract and its duration if it is for a fixed period.
  • Notice periods.
  • Annual leave entitlement.
  • All the payments (salary, bonuses and so on) which the employee may be entitled to and the time schedule for their payment.
  • The usual duration of daily or weekly employment.
  • The application of any collective agreements.

Cyprus Employment Contract

Types of employment agreements

Employment contracts can be written in any language that is understandable to both parties or, if the contract is written in a language that the employee does not understand, its provisions must be orally explained to the employee. However, it is advisable for the employer to obtain the confirmation of an independent professional (for example, a lawyer) that the terms of the contract have been appropriately explained to the employee.

Terms are implied into contracts of employment both by virtue of statute and the common law. Implied terms include rights and obligations of both the employer and the employee. Common law creates an implied duty of fidelity of the employee to the employer, which is a fundamental term of the contract of employment and the employment relationship as a whole.

Cyprus working hours

Generally, the number of working hours for a five-day week should not exceed 48 hours per week, including overtime. However, in certain sectors (such as the hotel industry) different limitations can apply.

Rest breaks

Employees are generally entitled to a minimum of 11 continuous hours of rest per 24 hours and 24 continuous hours of rest per week. Either two rest periods of 24 continuous hours each, or a minimum rest period of 48 continuous hours within every 14-day period, must also be given.

Overtime

Overtime pay is generally not regulated by law in Cyprus and is usually a matter of agreement between employer and employees. However, in certain industries in which working time is regulated by specific legislation and regulations, overtime payment may also be regulated accordingly. For example, employees in the hotel industry are entitled by law to receive overtime pay for work performed outside the prescribed daily working hours and on weekends and public holidays, at a rate of one and a half times the normal pay. Collective agreements may also regulate overtime pay.

Vacation leave in Cyprus

All workers are entitled to paid leave for at least four weeks per year. Employees who work five days a week are entitled to at least 20 days’ leave and those who work six days a week are entitled to 24 days’ leave. This requirement can be replaced with cash only in the event of the termination of the employment relationship.

Sick leave: 

In practice, the majority of employers do not demand a sick note for any absence less than three days. Each employer may decide differently on the specific days of sick leave that the employees are entitled to, given that this is not regulated by the law. Under the law, no payment is made for the first three days of sick leave. After the three days, a sick note is required in order to be able to receive any sick leave payment by the Ministry of Labour, Welfare and Social Insurance. An employer can lawfully terminate the employment of an employee who has been absent for more than 26 consecutive weeks. However, it is advisable for employers to proceed with sending the employee to a doctor of their choice in order to ascertain his medical condition prior to deciding his dismissal.

Under the law, no payment is made for the first three days of sick leave by the Ministry of Labour, Welfare and Social Insurances. An employee who is absent for more than three consecutive days is entitled to file a claim for receiving a sick leave payment which is a percentage of his salary by the Social Insurance Fund (not by the employer). It is at the employer’s discretion to pay either for the first three days of absence or the additional percentage of the employee’s salary.

The maximum number of days for which sick pay is payable is 156 days during a single period of interrupted employment. This can be extended for a further period of 156 days during the same period of interrupted employment, provided that the insured is eligible to receive an incapacity (disability) pension but is not expected to remain permanently disabled to work.

Cyprus Maternity Leave

An employed pregnant woman is entitled to maternity leave for 18 consecutive weeks. Of these, 11 weeks are compulsory for both the employer and the employed woman (two weeks before the week of the expected delivery date, the week of delivery and eight weeks after the week of delivery). In order to be entitled to maternity leave, the pregnant woman must provide, on time, to her employer a medical certificate, certifying her pregnancy and the expected week of her delivery. In the event of the birth of more than one child the maternity leave is extended by four weeks for each child.

Cyprus Severance Laws

Notice periods

The notice period under the Termination of Employment Law 1967, as amended, depends on the employee’s continuous length of service, and must be given in writing. The following notice periods must be given:

  • More than 26 weeks but less than 52 weeks’ service: one week’s notice.
  • More than 52 weeks but less than 104 weeks’ service: two weeks’ notice.
  • More than 104 weeks but less than 156 weeks’ service: four weeks’ notice.
  • More than 156 weeks but less than 208 weeks’ service: five weeks’ notice.
  • More than 208 weeks but less than 260 weeks’ service: six weeks’ notice.
  • More than 260 weeks but less than 312 weeks’ service: seven weeks’ notice.
  • 312 weeks’ service or more: eight weeks’ notice.

Severance payments

Severance payments are calculated according to years of employment as follows:

  • Two weeks’ wages for each year of service up to four years.
  • Two-and-a-half weeks’ wages for each year of service from five to ten years.
  • Three weeks’ wages for each year of service from 11 to 15 years.
  • Three-and-a-half weeks’ wages for each year of service from 16 to 20 years.
  • Four weeks’ wages for each year of service beyond 20 years.

Cyprus Tax

The following table lists the PIT rates and bands currently applicable to individuals:

Chargeable income for the tax year (EUR)

Tax rate (%)

Accumulated tax (EUR)

From

To

0

19,500

0

0

19,501

28,000

20

1,700

28,001

36,300

25

3,775

36,301

60,000

30

10,885

60,001

and above

35

 

Social security contributions

As of 1 January 2019, the employees’ own contribution to the state-administered social insurance fund is 8.3% of their gross remuneration, with a maximum annual cap on insurable emoluments as of 1 January 2020 of EUR 54,864. The rate of 8.3% applies for both employee and the employer up to 31 December 2023. Thereafter, the rate will increase every five years until it reaches 10.7% as of 1 January 2039.

As of 1 January 2019, the contributions of self-employed persons are 15.6% of their income (14.6% for 2014 through 2018). Thereafter, the rate will increase every five years until it reaches 20.4% as of 1 January 2039. The amount of the contributions is subject to a lower and a maximum limit, depending on the profession or trade of the self-employed person. These limits are set on an annual basis.

 

Additional Benefits in Cyprus

A 13th salary payable around mid-December of each year is customary and widely practiced in Cyprus. There are no other mandated bonuses but this largely depends on the industry (for example, in the banking and insurance sector bonuses are often included in employment contracts).

Cyprus Holidays

  • New Year’s Day: 1 January.
  • Epiphany: 6 January.
  • Green Monday (beginning of Lent): a day in March (movable).
  • Good Friday: a day in March/April (movable).
  • Easter Saturday, Sunday and Monday: during March/April (movable).
  • National Day: 1 April.
  • Labour Day: 1 May.
  • Holy Spirit Day: a day in June (movable).
  • Assumption Day: 15 August.
  • Cyprus Independence Day: 1 October.
  • Greek National Day: 28 October.
  • Christmas Day: 25 December.
  • Boxing Day: 26 December.

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

 

FAQ Cyprus

  • Cyprus working hours

    Generally, the number of working hours for a five-day week should not exceed 48 hours per week, including overtime. However, in certain sectors (such as the hotel industry) different limitations can apply.

  • Cyprus Holidays

    • New Year’s Day: 1 January.
    • Epiphany: 6 January.
    • Green Monday (beginning of Lent): a day in March (movable).
    • Good Friday: a day in March/April (movable).
    • Easter Saturday, Sunday and Monday: during March/April (movable).
    • National Day: 1 April.
    • Labour Day: 1 May.
    • Holy Spirit Day: a day in June (movable).
    • Assumption Day: 15 August.
    • Cyprus Independence Day: 1 October.
    • Greek National Day: 28 October.
    • Christmas Day: 25 December.
    • Boxing Day: 26 December.
  • Severance payments in Cyprus

    Severance payments are calculated according to years of employment as follows:

    • Two weeks’ wages for each year of service up to four years.
    • Two-and-a-half weeks’ wages for each year of service from five to ten years.
    • Three weeks’ wages for each year of service from 11 to 15 years.
    • Three-and-a-half weeks’ wages for each year of service from 16 to 20 years.
    • Four weeks’ wages for each year of service beyond 20 years.
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