Explore our EOR & PEO services in CYPRUS

As your EOR in Cyprus, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.


Your candidate is hired by a PEO in Cyprus provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

Island of Freedom

Country Overview

Cyprus is a small island nation located in the eastern Mediterranean Sea. It is known for its rich history, beautiful beaches, and warm climate. The official languages are Greek and Turkish, and the currency is the Euro.


The country is a member of the European Union, the United Nations, and the Commonwealth of Nations. The economy of Cyprus is based on the service sector, particularly tourism and financial services. It is famous for its shipping industry and is home to one of the busiest ports in the Mediterranean.

General Information

  • Population: ~1.200.000


  • Capital City: Nicosia (population: ~300.000)


  • GDP: ~$35 billions


  • GDP per capita: ~$40.100
  • Currency: Euro (EUR)


  • Unemployment: ~6%


  • Employer Taxes: 22.9%


  • Employee Taxes: 0% – 35%


Employment Contracts in Cyprus

In Cyprus all employees must have a written employment contract, which outlines the terms and conditions of their employment. The contract should include information on: the job position, working hours, remuneration, annual leave entitlement, notice periods, and other benefits.

Probation Period in Cyprus

The probation period can last up to 26 weeks, or six months, depending on the length of the employment contract. During this time, employers can assess the employee’s performance and decide whether or not they are a good fit for the job.


The period is not mandatory, but employers commonly use it to evaluate the employee’s abilities and suitability for the role. The terms of the probation period, including the duration, must be clearly stated in the employment contract.


During the probation period – the employer and employee have the right to terminate the contract without notice or compensation. However, the employee may be entitled to compensation if the agreement is closed due to discrimination or unfair treatment.


It’s recommended, that employers set clear expectations and goals for the employee during the probation period, and provide regular feedback to ensure the employee can improve and meet the job requirements.

Working Hours in Cyprus

The maximum working hours for a full-time employee are 48 hours per week, or an average of 8 hours per day. This can be extended to 60 hours per week in some instances – such as during busy seasons or emergencies.


Part-time employees have different working hour regulations as their hours are defined in the employment contract. The principles include: minimum rest periods, which must be at least 11 consecutive hours per day, and a minimum of one day off per week.


It’s vital that your employees do not work more than the maximum working hours, as this could result in legal action against your business. In addition, overtime hours must be compensated at a higher rate than regular hours, typically 1.5 times the average rate.


Employers as Cyprus EOR must also provide a safe working environment for their employees, and consider factors such as the temperature, humidity and lighting in the workplace, to ensure the health and safety of their workers.

Vacation Days in Cyprus

In Cyprus, employees are entitled to a minimum of 20 paid vacation days per year, in addition to public holidays. The entitlement to vacation days begins after one year of continuous employment.


For part-time employees, vacation days are calculated based on the number of hours worked, as defined in their employment contract. The calculation is based on a pro-rata basis of 20 working days per year.


Furthermore, employees are entitled to carry over up to 10 unused vacation days to the following year. Employers must ensure that their employees take their entitled vacation days within the year in which they are accrued.

Sick Leave in Cyprus

In Cyprus employees are entitled to sick leave and can take up to 30 working days of paid sick leave per year. However, the first three days of absence due to illness are not paid, known as the waiting period.


If an employee is absent due to illness for more than three days, they must provide a medical certificate from a registered doctor. Employers can request a second medical opinion at their own expense.


Sick leave can be taken for an individual’s illness or the condition of a close family member. Employees are also entitled to take up to five days of paid leave to care for a close family member..


Employers must understand their employees’ sick leave entitlements and provide them with the necessary support – during their absence due to illness. This can include assigning temporary work to another employee or hiring a temporary replacement.

Wages and Salary Payment in Cyprus

Paying employees at least once a month is a legal requirement in Cyprus. Many employers choose to pay their employees on a bi-weekly or monthly basis, which can help with cash flow management. Additionally, providing payslips with clear information about gross pay, deductions, and net pay is crucial to maintain transparency and avoid disputes.


In Cyprus, employers are also responsible for making social insurance contributions on behalf of their employees. These contributions are a percentage of an employee’s gross earnings and are currently set at 7.8% for employees and 8.3% for employers.


For employers, it’s crucial to comply with salary payment regulations to avoid penalties and legal action. Ensuring accurate and timely payments is vital for maintaining a positive and productive work environment. As a responsible business owner, it’s important to prioritize employee well-being by meeting these obligations.

Public Holidays in Cyprus

In Cyprus, there are 15 public holidays each year. This includes ten fixed public holidays, such as Christmas Day and New Year’s Day, and five floating holidays, which are determined by the government and may change each year.


Employees who work on a public holiday are entitled to a day off in lieu or to receive double pay for the day worked. It’s crucial to ensure that employees are informed of their entitlements and that any public holiday pay or time off is accurately recorded in their revenue and leave records.

Employer Taxes in Cyprus

Firstly, social insurance contributions must be made by both the employer and employee. The employee contributes: 7.8% of their gross salary and the employer contributes 8.3% of their gross pay.


Employers are required to pay a payroll tax on their employees’ salaries. This tax rate depends on the employee’s gross wage and can range from: 2.75% to 3.7%. Employers also pay the annual corporation tax, which is currently set at 12.5% on taxable profits.


To avoid any penalties or legal action it’s vital to ensure that all taxes are paid on time and accurately.

Employee Taxes in Cyprus

It’s a requirement for employees to pay social insurance contributions based on their earnings. The current contribution rate is 7.8% for employees and is deducted from their gross pay.


Employees also have to pay income tax, which is calculated based on their yearly earnings. The tax rates vary depending on the amount of income, with the lowest rate being: 20% and the highest rate being: 35%.


Ensure, that you deduct the correct amount of employment taxes from your employees’ paychecks and submit them to the appropriate authorities. Failure to do so can result in penalties or legal action.

Notice Period in Cyprus

Employers must give notice to their employees if they wish to terminate their contracts. If an employee has worked for less than 26 weeks, the notice period is one week, and the notice period is two weeks for employees who have worked between 26 and 52 weeks. The notice period increases to four weeks, for those who have worked over 52 weeks. However, some employment contracts may have longer notice periods.


Complying with these regulations is vital to avoid any legal issues. Additionally: providing employees with sufficient notice can help maintain a positive relationship and minimize disruption to the business.

Termination / Severance in Cyprus

First and foremost, Cyprus EOR employers must have a valid reason for terminating an employee’s contract, such as: poor performance, misconduct or redundancy. If an employer fails to provide a good reason for termination – they may face legal action.


In terms of severance pay, employees are entitled to receive it if they have worked for the company for at least as 26 weeks. The amount of severance pay is calculated based on the employee’s years of service and is set at one week’s income for every year worked.

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