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Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
EUR € (Euro)
Employer contributions
~11.5% employer SS (SIS + Cohesion Fund + Redundancy Fund)
Minimum wage
€1,000 EUR (National Minimum Wage, since 2023)
Payment frequency
Monthly
Calendar year (Jan 1 to Dec 31)
Capital
Nicosia
Timezone
EET (GMT+2)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~€3,345 EUR total
/month
For a gross salary of
€3,000 EUR gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
~11.5% employer SS (SIS + Cohesion Fund + Redundancy Fund)
Mandatory extras
13th Salary
Monthly admin
Monthly payroll → SS by end of following month → withholding tax monthly → annual IR return
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
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A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~€3,345 EUR total
Example gross salary
€3,000 EUR gross/month
~€2,022 EUR net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~€345 EUR employer SS
Employer contributions on that salary
Employer contributions
~11.5% employer SS (SIS + Cohesion Fund + Redundancy Fund)
Employee contributions
~8.8% employee SS
Total cost above gross
~11.5% above gross
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~€2,100 EUR
Per month
Nicosia
€2,200 - €3,500 EUR
~20%
Limassol
€2,500 - €4,200 EUR
~25%
Monthly gross. National average salary per year:
~€25,200 EUR
Minimum wage
€1,000 EUR (National Minimum Wage, since 2023)
Paid:
Monthly
Extra pay
13th Salary
Common, discretionary or by CBA
December
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
0% → 20% → 25% → 30% → 35%
Tax year:
Calendar year (Jan 1 to Dec 31)
Filing calendar
Monthly by end of next month
Social security payments
July 31 (electronic)
Income tax
By end of April
Employee tax certificate
IR63 (Certificate of Emoluments)
July 31
Annual return
Income Tax Return (TD1)
Late payment penalties
Late SS: 9% annual; late tax: 5% + 1.75% monthly
Who collects what
Inland Revenue Department (IRD)
Income tax
Social Insurance Services (SIS)
Social security
Department of Labour Relations
Employment law
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Annual Leave
20 working days
Public holidays
15 public holidays
Sick leave
Sick Leave
SIS pays ~60% from day 4
Maternity leave
18 weeks
72% of insurable earnings via SIS
The contracts you can use, and what ending an employment relationship costs.
Permanent
Contract of Indefinite Duration
Fixed term
Contract of Definite Duration
Independent contractor
Self-Employed / Freelancer
Collective agreements
Collective Agreement
Ending employment
Termination Benefits (Redundancy Fund)
How it is calculated
Employers pay into fund; workers claim from fund
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
Minimum Wage Misapplication for Specific Roles
Risk Level: HIGH
Cyprus introduced its national minimum wage in 2023, but it applies differently to new employees (€1,000/month in first 6 months, then €1,100). Many employers fail to apply the 6-month increase automatically, creating wage arrears. How to avoid it: track each hire date and raise the salary to €1,100 once the six months are up.
Redundancy Fund Under-Contribution
Risk Level: MEDIUM
Employers must contribute 1.2% of insurable earnings to the Redundancy Fund. Excluding bonuses and shift pay from the insurable earnings base creates systematic under-contribution, which SIS discovers during audits. How to avoid it: include every insurable earnings component, bonuses and shift pay too, in the Redundancy Fund base.
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Next topicOntop is the Global Workforce Engine for contractor teams: contracts, compliance documents and payments in 150+ countries.
150+
countries
$49
per contractor per month
1 run
to pay your whole team
USD
Global Account for every contractor
FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.