Payment in Cyprus

Back to guides

General Employee Pay Regulations in Cyprus

Employee pay in Cyprus is regulated by national labour laws and various sector-specific agreements, ensuring that employees receive fair and timely wages. Wages must be paid in accordance with employment contracts, and employers are required to provide timely payment of salaries, typically on a monthly basis. Certain sectors, such as retail and hospitality, may have sector-specific minimum wages, while others are governed by individual or collective agreements.

Employees are also entitled to statutory benefits such as overtime pay (150%-200% depending on the circumstances), holiday pay, and social insurance contributions. Additionally, payroll deductions for social insurance, income tax, and any other legal obligations must be handled by the employer. Employers must issue payslips detailing salary, deductions, and contributions for transparency.

Failure to comply with wage laws or delays in payment can lead to fines, employee claims, or legal action under Cypriot labour law. The following are key aspects of how employee pay is managed and regulated, and what employers are required to do:

Minimum wage

Although Cyprus does not have a universal minimum wage across all sectors, there are sector-specific minimum wages set by the government, particularly for roles such as salespeople, clerks, healthcare workers, and cleaners.

Employers must comply with the minimum wage regulations for specific roles. In the absence of a statutory minimum wage for a particular sector, wages are usually determined by individual or collective agreements. The minimum wage rates are periodically reviewed and adjusted by the government, often considering the cost of living and inflation.

Frequency

Wages in Cyprus are typically paid on a monthly basis unless otherwise specified in the employment contract. Some sectors or roles may use weekly or bi-weekly payment systems.

Employers must ensure that employees are paid on time as per the agreed schedule. Payment delays or withholding wages without a valid reason are not permitted. Employers must also issue a detailed payslip with every payment, outlining the employee’s gross salary, deductions (such as social insurance and income tax), and net take-home pay.

Deductions and contributions

Employers are responsible for making the necessary payroll deductions for each employee, including contributions to the Social Insurance Fund, National Health Insurance System (NHIS), income tax, and General Healthcare System (GHS).The employer must deduct and remit employee contributions to social insurance and healthcare systems, ensuring legal compliance. The standard deduction rates include 8.3% for social insurance from the employee and 2.65% for NHIS.Employees are taxed progressively, with the employer handling withholding tax according to the employee’s income level

Payday

In Cyprus, payday is typically monthly, though some sectors may have weekly or fortnightly payments. Employers must pay wages on the agreed date, typically via bank transfer, and provide a detailed payslip outlining gross pay, deductions (e.g., social insurance, income tax, NHIS), and net take-home pay.

Regulations require timely payment, proper deductions, and compensation for overtime, which is paid at 150% for regular overtime and 200% for work on Sundays or public holidays. Non-compliance, such as late payments or incorrect wages, can lead to penalties and employee claims through the Labour Disputes Court.

Employers must adhere to contract terms and ensure payroll accuracy to avoid fines and legal actions.

Penalties for non-compliance

Employers who fail to comply with pay regulations, such as delayed payments, non-payment of overtime, or failure to remit social insurance contributions, can face fines, penalties, and potential legal action. Employees can file claims with the Department of Labour or take the matter to the Labour Disputes Court to seek back pay, damages, or compensation.

Need help employing your international workers?

Master the complexities of global employment and ensure a seamless employment experience for your team.

Talk to us

Start employing your international workers today →

Schedule a 30-minute consultation to learn how we can help you employ compliantly.