Employment Law

Cyprus Employment Contract

Technically, an employment contract in Cyprus can be oral or written. However, we recommend that you always provide a formal written contract for every employee you employ in the country. The contract should cover important details such as pay, working hours, benefits and rights. Additionally, they should be written in Turkish or Greek and use Euros.

Fixed Term

Probation	6 months – 2 years (maximum)
Termination notice period	1 week notice: Employment period 26 – 51 weeks 2 weeks notice: Employment period 52 – 103 weeks 3 weeks notice: Employment period 104 – 155 weeks 4 weeks notice: Employment period 156 – 207 weeks 5 weeks notice: Employment period 156 – 207 weeks 6 weeks notice: employment period 208 – 259 weeks 7 weeks notice: employment period 260 – 311 weeks 8 weeks notice: employment exceeding 312 weeks
Severance pay	2 weeks pay per year for the first 4 years of service 2.5 weeks pay per year for years 5 – 10 3 weeks pay per year for years 11 – 15 Years 3.5 weeks pay per year for 16 – 20 years 4 weeks pay per year for 20+ years

Indefinite

Probation	6 months – 2 years (maximum)
Termination notice period	1 week notice: Employment period 26 – 51 weeks 2 weeks notice: Employment period 52 – 103 weeks 3 weeks notice: Employment period 104 – 155 weeks 4 weeks notice: Employment period 156 – 207 weeks 5 weeks notice: Employment period 156 – 207 weeks 6 weeks notice: employment period 208 – 259 weeks 7 weeks notice: employment period 260 – 311 weeks 8 weeks notice: employment exceeding 312 weeks
Severance pay	2 weeks pay per year for the first 4 years of service 2.5 weeks pay per year for years 5 – 10 3 weeks pay per year for years 11 – 15 Years 3.5 weeks pay per year for 16 – 20 years 4 weeks pay per year for 20+ years

Cyprus Working Hours

As in much of Europe, the standard working week for employees in Cyprus is 40 hours, five days in total. The maximum working week, including overtime, is 48 hours.

Holiday Policy

Cyprus Vacations

Employees in Cyprus are entitled to at least 20 days of paid leave per year after working for their employer for at least 48 weeks in a year. Employees who work six days a week are entitled to 24 days of leave.

Cyprus Sick Leave

In Cyprus, employees are not paid for the first three days of absence due to illness, although voluntary absence by the employer is quite common. Social security covers a maximum of 156 days beyond this period, which can be extended to a further 156 days if the employee is considered suitable for receiving a special incapacity pension.

Maternity and Paternity Leave in Cyprus

Employees in Cyprus are entitled to 18 weeks of paid maternity leave, which must begin two weeks before the birth of the child. Payments are made by maternity benefits.

Both parents can take a further 18 weeks of unpaid parental leave if they wish.

Employee Severance Pay and Termination of Contract in Cyprus

The minimum notice period for mandatory termination depends on the number of years the employee has served his or her employer. For services between 6 and 12 months, the notice period is one week. This right increases gradually, with a maximum of eight weeks' notice after six years of service.

Severance pay also varies based on an employee's length of service. For service under four years, two weeks' salary is paid. For employees with more than 20 years of service, wages can be increased by up to four weeks.

The standard probation period is six months, but if the employer and employee agree, the probation period can be up to two years.

Cyprus Tax Law

Employers and employees must pay various mandatory contributions. Both must pay social security contributions of 7.8%. In addition, employers must pay 0.5% to the Industrial Training Fund, 2% to the Social Cohesion Fund and 1.2% to the Redundancy Fund.

Income tax in Cyprus is progressive, ranging from 0% to 35% depending on income level.

The corporate tax in Cyprus is 12.5%.

Health Insurance in Cyprus

Cyprus combines public and private healthcare, so many employers choose to offer private health insurance to their employees as part of their benefits package.

Salary and Benefits

Compensation Law in Cyprus

Minimum wage regulations in Cyprus are complex. Different types of jobs have different minimum wage standards, and some have no regulations at all. Therefore, when recruiting in Cyprus, you should carefully determine which specific rules apply to your organization and its employees.

Benefits Administration in Cyprus

Setting up an employee benefits system for employees in Cyprus can be difficult. Complex regulations and organizations can require significant time, effort and investment from employers.

At Horizon, we specialize in setting up and running Cyprus employee benefits systems. We'll use our experience to handle everything, ensuring you're ready to do business in Cyprus quickly and efficiently.

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