What are the employer contribution rates in Cyprus for 2026?

Employer contributions are: Social Insurance 8.8% (capped at €68,904/year), GESY 2.9% (capped at €180,000/year), Redundancy Fund 1.2%, Industrial Training Fund 0.5%, and Social Cohesion Fund 2.0%.

Is the 13th salary mandatory for employers in Cyprus?

The 13th salary is not universally mandated by law in Cyprus, but it becomes a legal obligation if it is included in the employment contract, a collective agreement, or has been established as company practice. Once established, failure to pay it is a criminal offence.

What is the total employer overhead percentage in Cyprus?

Without the Annual Holiday Fund, the minimum employer overhead is approximately 14.9% above gross salary. Including the Holiday Fund (8%) raises the total overhead to approximately 22.9%.

Free Employer Tool

Employer Cost Calculator

Calculate the true annual cost of hiring an employee in Cyprus including all mandatory contributions

Gross Monthly Salary

Gross monthly salary *

€

Enter the employee's gross monthly salary before any deductions

Bonuses & Funds

Include 13th salary

One additional month's salary — common practice in Cyprus, paid at Christmas

Include 14th salary / Easter bonus

Half a month's salary — paid at Easter, less common but used in some sectors

Include Annual Holiday Fund (~8%)

Applies to most employers — exempt only if you grant leave more generous than the statutory minimum

Enter a monthly salary to see the full cost breakdown.

How to Use the Employer Cost Calculator

Follow these steps to calculate the true cost of hiring an employee in Cyprus:

1
Enter the gross monthly salary
Type the employee's gross monthly salary — this is the salary before any deductions, as stated in the employment contract.
2
Toggle any applicable bonuses
Enable the 13th salary and/or 14th salary (Easter bonus) if your company pays them. The calculator will add them to the total annual salary payments.
3
Toggle the Annual Holiday Fund if applicable
If your business is in tourism, construction, or another sector where the Holiday Fund applies, enable this option to include the ~8% employer contribution.

Cyprus Employer Contribution Rates — 2026

The following mandatory employer contributions apply in Cyprus for 2026. Rates are applied on the employee's gross annual earnings (monthly salary × 12).

Contribution	Rate	Cap
Social Insurance	8.8%	€68,904 insurable earnings/year
GESY (General Health System)	2.90%	€180,000/year
Redundancy Fund	1.2%	€68,904/year (same as SI cap)
Industrial Training Fund (HRDA)	0.5%	Uncapped
Social Cohesion Fund	2.0%	Uncapped
Annual Holiday Fund (most employers)	~8%	Uncapped

How the Calculation Works

Annual salary = monthly gross × 12 Plus 13th salary: + monthly gross (if enabled) Plus 14th salary: + (monthly gross × 0.5) (if enabled) Total annual salary payments = the sum of the above Contributions are calculated on the base annual gross (monthly × 12): Social Insurance = min(annual gross, €68,904) × 8.8% GESY = min(annual gross, €180,000) × 2.9% Redundancy Fund = min(annual gross, €68,904) × 1.2% ← capped at SI limit Training Fund = annual gross × 0.5% (no cap) Social Cohesion = annual gross × 2.0% (no cap) Holiday Fund = annual gross × 8% (if enabled, no cap) Total annual cost to employer = total salary payments + total contributions Monthly equivalent = total annual cost ÷ 12 Overhead % = (total contributions ÷ total salary payments) × 100

Frequently Asked Questions

Are employer Social Insurance contributions the same rate as employee contributions?: Yes. Both the employer and employee each contribute 8.8% of the employee's insurable earnings to Social Insurance, up to the annual cap of €68,904 (2026). They are separate contributions — the employer's share is paid on top of the gross salary and does not reduce the employee's take-home pay.
What is the Social Insurance insurable earnings cap for 2026?: The insurable earnings cap for 2026 is €68,904 per year (€5,742 per month). For employees earning above this threshold, Social Insurance is calculated only on the capped amount. This cap is revised annually.
Is the 13th salary subject to employer Social Insurance contributions?: Yes. In Cyprus, the 13th salary is treated as regular employment income and is subject to Social Insurance, GESY, and other contributions. For this calculator, contributions are calculated on the base monthly × 12 salary (matching the statutory insurable earnings definition), and bonus payments are shown separately in the cost breakdown.
Who must pay into the Annual Holiday Fund?: The Annual Holiday Fund applies to most employers in Cyprus, not just tourism or construction. An employer can be exempt only if they provide employees with annual leave more generous than the statutory minimum (at least 21 working days on a 5-day week, or 25 days on a 6-day week). If you pay leave directly at a superior rate, you can apply for exemption. When in doubt, include it.
Does the Redundancy Fund pay the employee directly?: The Redundancy Fund pays 60% of any statutory redundancy compensation to the employee. The employer pays the remaining 40% directly. The employer's ongoing 1.2% contribution funds this government-administered safety net.
What does the Industrial Training Fund (HRDA) contribution pay for?: The 0.5% contribution goes to the Human Resource Development Authority of Cyprus (HRDA/ΑνΑΔ). In return, employers can apply for HRDA-funded training subsidies for their employees, meaning this contribution often pays back through reduced training costs.

Disclaimer

This calculator provides estimates for planning purposes based on 2026 Cyprus employer contribution rates. It does not constitute legal, tax, or accounting advice. Actual contribution amounts may vary based on the employee's insurable earnings, applicable sector agreements, collective bargaining arrangements, or specific exemptions. Always consult a licensed Cyprus accountant or HR professional to confirm your exact employer obligations.