What an Employee Costs in Cyprus in 2026
The gross salary is roughly six-sevenths of it. Five separate employer contributions sit on top, and one of them has no ceiling.
When a client asks what it costs to hire someone, they usually have the gross salary in mind. The gross salary is the largest part of the answer but not the whole of it.
The five employer contributions
- Social insurance, 8.8%, capped at the annual insurable earnings ceiling
- Redundancy fund, 1.2%, capped at the same ceiling
- Industrial training, 0.5%, capped at the same ceiling
- Social cohesion fund, 2.0%, with no ceiling at all
- GESY, 2.9%, capped at total income of €180,000
For a salary below the insurable earnings ceiling, that totals 15.4% on top of gross. The employee separately pays 8.8% social insurance and 2.65% GESY out of their own salary, which affects their take-home but not your cost.
A worked example
Take a gross salary of €40,000, comfortably below every ceiling.
- Gross salary, €40,000
- Social insurance, €3,520
- GESY, €1,160
- Redundancy fund, €480
- Industrial training, €200
- Social cohesion, €800
- Total employer cost, €46,160
That is €3,847 a month against a headline salary of €3,333.
Why the percentage falls at higher salaries
Social insurance, redundancy and training all stop at the insurable earnings ceiling. Above it, those three contributions are frozen in absolute terms while the salary keeps rising, so the percentage on top of gross falls.
Social cohesion does not behave this way. It has no ceiling, so it continues at 2.0% of the full salary however high that goes. On senior salaries it becomes the largest single employer contribution.
What the percentages do not include
Annual leave, public holidays, and any thirteenth salary are part of the cost of employment but are not contributions. They belong in the budget even though they do not appear in the table above.
The statutory minimum annual leave is 20 days. A thirteenth salary is not mandatory; where it is paid, it is because the contract or the practice of the business provides for it, and it should be budgeted accordingly.
Employer registrations come first
Before anyone is paid, the company registers as an employer with the Social Insurance Services and the employee is registered against it. PAYE and contributions are then due by the end of the month following the payroll month, every month, without exception.
The calculator on this site does the arithmetic on any salary, including working backwards from a net figure the candidate has asked for.
Written by Antonis Lappas, BSc, FCCA. This is general information, not advice on your circumstances. Rules change, check the date on this article, and speak to us before acting on it.