Cyprus Employee Tax

Cyprus Employee Social Contributions and Minimum/Maximum wage values:

Introduction: 
"Cyprus has developed a very appealing scheme for the taxation on employees. The costs of tax contributioins both for the employee as for the employer are very low. On the other hand, the wages are calculated on strict given values allowing employers to calculate very closely both employee costs and Cyprus employee tax values."

Cyprus Employee Social Contributions

The Cyprus social insurance scheme is compulsory for all those working in Cyprus. It provides pensions and benefits in all areas of social security and is financed by contributions from the employee, employer and the state.

Currently, social insurance contributions are 16.6 per cent of earings (6.3 per cent of gross salary is paid as contribution by the employee and 6,3 per cent by the employer and the state pays the remaining 4 per cent). Self-employed people pay a total of 11.6 per cent of income and the state contributes 4 per cent.

Other costs pertaining to the employer amount to approximately 3,5% for the payment of the base for the redundancy fund, industrial training and social cohesion fund.

Cyprus Employee & Self-Employed Minimum Salaries

The upper limits of salary amount to a monthly of 4004EUR/employee/ per month. The lower limits of acceptance of salaries are estimated at approximately 1320EUR/employee/month for professionals with less than 10 years of practice and 2730EUR/employee/month for professionals with more than 10 years of experience.

If you contribute to Cypriot social insurance, you and your family are entitled to free or subsidised medical and dental treatment.  Anyone who has paid regular social security contributions in another EU country for two full years prior to coming to Cyprus is entitled to similar cover for a limited period, and EU pensioners are entitled to free treatment.

A distinction is made between a resident employee and non-resident employee.

Resident employee:

a) Is an employee working wholly in Cyprus.
Taxation at source under the PAY AS YOU EARN (PAYE) system applies for salaries, wages, directors remuneration, remuneration from offices and pensions as well as fringe benefits.

b) Is an employee working partly in Cyprus and partly outside Cyprus:
Employees are liable to tax at normal rates on the whole amount of such income from employments. A n exemption applies in respect of the remuneration relating to rendering services to 1) a permanent establishment outside Cyprus, of a resident employer or 2) to a non resident employer outside Cyprus. The services must be rendered to a total aggregate period in the year of assessment for more than 90 days to apply for the exemption.

Non-resident employee:
Employees are liable to tax only in respect of emoluments for the services rendered while in Cyprus and for pensions from such employments.

For more information on the taxation of a cyprus employee’s personal income view table present on cyprus income tax menu.

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Webpage content sources: Aprodite Sun Properties website & WorldwideTax Site.