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Situated between Europe, Asia and Africa, Cyprus is the perfect option for companies looking to explore new markets. With a team of remote employees in Cyprus you will be able to create business connections throughout three different continents.
As employment costs in Cyprus are lower than in other European countries – not to forget the country’s attractive tax system – hiring there means recruiting skilled workers at very competitive rates. With nearly half the local population holding a tertiary degree, companies can be sure to have a large talent pool to choose from, especially as around 80% of people in Cyprus speak very good English.
Although labour law in Cyprus does not mandate employment contracts to be in writing, it is best practice to provide new employees with a detailed employment contract outlining the exact terms of employment. In case no written employment contract is put in place, employers have to provide their new employees with a written statement containing all the necessary basic terms, including:
Identification of both parties – including a registered company office
Date of commencement (and employment duration for temporary contracts)
Job description, duties and responsibilities
Basic salary as well as other compensation or benefits
Total number of holidays
Notice periods for employment termination
In Cyprus, the first 26 weeks of every employment usually count as probation.
Working Hours and Breaks
Working hours in Cyprus vary between job sectors and are subject to collective agreements but most employees work between 38 and 40 hours per week.
When it comes to employee rest periods, the following regulations apply:
an employee’s daily rest period must not be shorter than eleven hours
every employee must be granted an uninterrupted weekly rest period of at least 35 hours
after six hours of consecutive work, employees are entitled to 15 minutes of rest
Any work performed beyond standard working hours is considered overtime and is permitted as long as the employee’s weekly working time does not exceed 48 hours in total. Remuneration rates for overtime are not indicated by law but are subject to both individual and collective agreements.
It is possible to pay employees in Cyprus either on a weekly ormonthly basis.
There are only certain professions in Cyprus that are subject to national minimum wage regulations including sales persons and office workers. For these job categories, the minimum is currently (January 2022) set at EUR 870 per month. According to law, it must increase to EUR 924 after six months of employment. The government is expected to fix a national minimum wage in early 2022.
Sick leave in Cyprus is regulated by collective as well as individual agreements. Employers are not obligated to provide their employees with sick pay. In those cases where sick leave is not covered by the employer, employees receive sick leave benefits from social security for a maximum duration of 156 days – extendable to 312 days in certain cases.
Although not required by law, annual bonuses are common practice among companies in Cyprus.
Taxes and Social Security Contribution
Employees and employers in Cyprus are subject to the following tax and social security contribution rates (as of 2022):
Individual income is taxed progressively based on the following tax brackets:
– up to EUR 19,500: 0%
– EUR 19,500 to EUR 28,000: 20%
– EUR 28,000 to EUR 36,300: 25%
– EUR 36,300 to EUR 60,000: 30%
– over EUR 60,000: 35%
Employees in Cyprus are entitled to a minimum of 20 days of paid annual leave – 24 days for those employees working a six-day week. In addition, Cyprus observes between 14 and 17 public holidays every year.
Maternity Leave and Paternity Leave
Female employees can claim up to 18 weeks of maternity leave of which two weeks must be taken before and nine after birth. During maternity leave, the mother receives maternity allowances from social security equaling 72% of her usual wages – capped at EUR 753.32 per week. A new law was passed in 2021 which increases maternity leave to 22 weeks for the second child and to 26 weeks for any subsequent child.
Fathers are entitled to 14 days of paternity leave within the first 16 weeks after the child’s birth during which they receive the same allowances as mothers during maternity leave.
Mothers and fathers are entitled to 18 weeks of unpaid parental leave after their baby is born or after having adopted a child. This leave must be taken before the child turns eight.
Additional Leave and Benefits
There are no legal provisions for additional leave. However, there may be collective agreements granting further leave to employees.
In addition to employment termination by default – i.e. in case of a fixed-term contract – resignation and mutual agreement, employment in Cyprus may be terminated due to the following reasons (non-exhaustive list):
summary dismissal due to gross misconduct (no notice required)
breach of employment contract (no notice required)
employee’s long-term illness
redundancy or other business-related reasons
Except for the first two cases, employers and employees have to observe the following notice periods, depending on the employee’s length of service:
Length of service
up to 26 weeks
no notice required
up to 51 weeks
up to 103 weeks
up to 155 weeks
For every additional 52 weeks of employment, the minimum notice period increases by an additional week up to a maximum of eight weeks. For employees, the following notice periods apply:
26 to 51 weeks = one week
52 to 259 weeks two weeks
over 260 weeks = three weeks
Employees who are made redundant are entitled to compensation payments which are calculated as follows:
up to four years of service: two weeks’ payfor each continuous period of employment of 52 weeks
five to ten years of service: two and a half weeks’ pay for each continuous period of employment of 52 weeks
eleven to fifteen years of service: three weeks’ pay for each continuous period of employment of 52 weeks
sixteen to twenty years of service: three and a half weeks’ pay for each continuous period of employment of 52 weeks
more than twenty years of service: four weeks’ pay for each continuous period of employment of 52 weeks
Hiring in Cyprus?
Not sure if you should start with a contractor or go ahead and hire a full-time teammate in Cyprus? The Lano platform makes it easy to go from freelance to full-time employee. Get expert guidance from the Lano team to compare your options and keep growing.