Updated July 2026
Updated June 2026. Every employee in Cyprus has 10.95% deducted from their gross salary before income tax — 8.3% Social Insurance plus 2.65% GESY (the national health system). On top of that, their employer pays a further 14.65% of gross in mandatory contributions. This guide breaks down every rate, applies them to a real salary, and explains the annual insurable earnings ceiling that caps the bill.
Key Takeaways
- Employee deductions total 10.95% of gross: 8.3% Social Insurance + 2.65% GESY — applied before income tax is calculated.
- Employer contributions total 14.65% of gross: 8.3% SI + 2.65% GESY + 1.2% Redundancy Fund + 0.5% Industrial Training + 2.0% Social Cohesion Fund.
- Contributions are capped at the annual insurable earnings ceiling (€62,868 for the 2025 insurance year — check sis.gov.cy for the 2026 update).
- At the Cyprus national average gross of €2,509/month, an employee takes home approximately €2,049/month net after all deductions and income tax.
- The same employee costs their employer roughly €2,877/month total — €368 more than the gross salary on the contract.
The full Cyprus contribution rate table 2026
All contributions are calculated on the employee’s insurable earnings — broadly, their gross cash salary. Non-cash benefits and certain allowances may be excluded; the Social Insurance Services (sis.gov.cy) publishes the definitive list of what counts. The rates below apply to all private-sector employees. Public servants operate under a separate scheme.
| Contribution | Fund / Recipient | Employee % | Employer % |
|---|---|---|---|
| Social Insurance | Social Insurance Services (sis.gov.cy) | 8.30% | 8.30% |
| General Health System (GESY) | Health Insurance Organisation (gesy.org.cy) | 2.65% | 2.65% |
| Redundancy Fund | Ministry of Labour (mlsi.gov.cy) | — | 1.20% |
| Industrial Training Fund | Human Resource Development Authority | — | 0.50% |
| Social Cohesion Fund | Social Insurance Services | — | 2.00% |
| Total | 10.95% | 14.65% |
Both the employee and employer contributions are remitted to the Social Insurance Services on a quarterly basis (or monthly for larger payrolls). Late payment attracts a 3% surcharge per month, so payroll compliance is a cash-flow priority, not just an accounting one.
Worked example: what €2,509/month gross actually means
The Cyprus national average gross monthly salary stood at €2,509 in Q1 2025 (CyStat). Here is what that figure looks like in full — for both the employee and the employer.
| Line item | Monthly (€) | Annual (€) |
|---|---|---|
| Gross salary | 2,509 | 30,108 |
| Less: Employee SI (8.3%) | − 208 | − 2,499 |
| Less: Employee GESY (2.65%) | − 66 | − 797 |
| Less: Income tax (PAYE — see bands below) | − 186 | − 2,227 |
| Net monthly take-home | ≈ 2,049 | ≈ 24,585 |
| Employer side (additional cost on top of gross) | ||
| Employer SI + GESY + funds (14.65%) | + 368 | + 4,411 |
| Total employer cost | ≈ 2,877 | ≈ 34,519 |
Income tax note: Cyprus uses a tiered PAYE scale. On €30,108 gross annual, the first €19,500 is tax-free; the next €8,500 (up to €28,000) is taxed at 20% (€1,700); the remaining €2,108 falls in the 25% band (€527). Total PAYE: €2,227/year. Employees claiming the 50% income tax exemption for new residents halve their taxable base, which substantially changes these figures.
The insurable earnings ceiling
Social Insurance and GESY contributions are not open-ended. They are calculated only up to the annual insurable earnings ceiling set each year by the Social Insurance Services. For the 2025 insurance year, the ceiling was €62,868 per year (€5,239/month). Once an employee’s cumulative earnings cross this threshold in the calendar year, SI and GESY contributions stop — their payslip contribution drops to zero for the remainder of the year.
For high earners — senior finance, tech, and shipping professionals in Limassol and Nicosia — this means contributions effectively cease in October or November, noticeably boosting net pay in Q4. The 2026 ceiling is typically published by sis.gov.cy in early Q1; always verify the current figure before running payroll.
Self-employed and freelancer rates
Self-employed individuals in Cyprus carry both sides of the Social Insurance contribution. The rate is 15.6% of declared insurable income (lower than the combined 16.6% employed rate, reflecting the absence of an employer). GESY for the self-employed is 4.0% — higher than the 2.65% employee rate because the self-employed bear the employer’s GESY share as well. The same annual insurable earnings ceiling applies.
For contractors running through a limited company and paying themselves a salary, the standard employed rates apply — the company is the employer. This is a structurally important point for the growing number of remote workers employed by foreign companies through a Cyprus entity: the Cyprus entity becomes the employer of record and must register and remit all contributions quarterly.
Frequently asked questions
What percentage is deducted from my salary in Cyprus for social insurance?
Employees pay 8.3% of gross insurable earnings into the Social Insurance Fund, plus 2.65% into GESY (the national health system). The combined employee deduction is 10.95% of gross, applied before income tax is calculated.
How much does an employer pay on top of gross salary in Cyprus?
Employers pay a total of 14.65% of gross in mandatory contributions: 8.3% Social Insurance, 2.65% GESY, 1.2% Redundancy Fund, 0.5% Industrial Training Fund, and 2.0% Social Cohesion Fund. On a €2,509 gross monthly salary, that is approximately €368 extra per month.
Is there a cap on social insurance contributions in Cyprus?
Yes. Contributions are calculated only up to the annual insurable earnings ceiling. For the 2025 insurance year this was €62,868 (€5,239/month). Earnings above this threshold are not subject to SI or GESY contributions. The Social Insurance Services update the ceiling annually — check sis.gov.cy for the current figure.
Do self-employed people pay social insurance in Cyprus?
Yes. Self-employed individuals pay 15.6% Social Insurance on their declared insurable income (covering both the employee and employer shares at a slightly reduced combined rate) plus 4.0% GESY. The same annual earnings ceiling applies.
When do employers remit social insurance contributions to the government?
Contributions are paid quarterly to the Social Insurance Services — at the end of January, April, July, and October — covering the preceding quarter. Larger payrolls may be required to remit monthly. Late payments attract a surcharge of 3% per month, which compounds quickly on large payrolls.
Does the 13th salary affect social insurance contributions?
Yes. The statutory 13th-month salary paid in December counts as insurable earnings and is subject to Social Insurance and GESY contributions in the same way as regular monthly pay — provided the employee has not already exceeded the annual insurable earnings ceiling by December.
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Related on Jobs Nicosia: Cyprus salary guide 2026 · Cyprus minimum wage 2026 · Cyprus 13th salary rules 2026.
