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Cyprus: Labour Regulation

Social Security

There is a mandatory earnings-related social security scheme in Cyprus which applies to both employed and self-employed individuals, whether resident or not, and whether Cypriot or not. However, non-resident employees of offshore entities are excluded. Self-employed persons are assessed on notional income levels depending on their occupation.

Contributions to the various funds are tax-deductible, and the employer's contribution is not taxable for the employee.

Benefits include a normal range of income and lump-sum payments.

The maximum salary amount on which social insurance contributions are estimated is set by the government, from April 2009, is around EUR48,048.

contributions by employer

8.5% (plus 2% 'social cohesion fee'

contributions by employee

6.8%

self-employed contributions

12.6% 

employer's contribution to Redundancy Fund and Industrial Training Fund

1.2% and 0.5%

employer's contribution to Holiday Fund

8%

NB The Defence Levy as such was abolished under a new taxation package agreed by Parliament in July, 2002, but various types of unearned personal income are subject to a defence tax between 3% and 20%.

 

 

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