Employment and social insurance deductions and social insurance contributions
1. Table of Social insurance deductions and social insurance contributions rates
Employers, employees, and self-employed persons are required to contribute to the following funds:
|Percentage of earrings|
|Social Insurance*, **||8,3||8,3||15,6|
|Social cohesion fund***||2,0|
|Industrial Training fund||0,5||___||___|
Holiday fund (if not exempted) 8,0 % (The percentage varies depending on the type of activity)
*The rate of 8,3 applies for both the employer and the employee as of 1 January 2019 and for the next five years. Thereafter, the rate increases every five years until it reaches 10,7%.
**As of 1 January 2019 the contributions of self-employed persons are 15,6% of their income. Thereafter, the rate increases by 1% every five years until it reaches 19,6%
***The amount contributed to the social cohesion fund is calculated on the entire emoluments regardless of the paid social insurance contribution’s maximum level of emoluments.
For late payment of social insurance deductions and contributions, a penalty of 3% on each month of delay is imposed. The penalty cannot exceed 27%
2. Level of emoluments subject to social insurance deductions and social insurance contributions for the year 2023
The minimum number of emoluments of self-employed persons to which social insurance is contributed varies depending on the nature of the activity.
3. Minimum salary limit for employees
Based on the Minimum Wage Decree of 2022 which entered into force on January 1, 2023, the national minimum wage is determined. According to the aforementioned Decree, every employee who works full-time must receive an initial monthly salary of at least €885 gross, and after a 6-month continuous period of employment with the same employer, this salary must increase to at least €940 gross.
4. Social Cohesion Fund
The employer is obliged to pay a contribution to the social cohesion fund of 2% on the amount of the salary of its employees without any restriction as to the amount of the salary
5. Persons exempt from Social insurance deductions and social insurance contributions
- Employment of a person who does not have his habitual residence in Cyprus or in another member state, in the service of an employer, who has neither his habitual residence nor his headquarters in Cyprus nor the place of business in Cyprus.
- Other exemptions governed by different laws
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