Two contribution streams
Payroll Administration in Cyprus
Cypriot payroll runs tax withholding plus two separate contribution streams, each with employer and employee shares.
GCC business setup specialists
The health contribution is a separate calculation
Alongside income tax withheld at source and social insurance, Cyprus operates a national health system funded by its own contributions from employers, employees and others — calculated separately, on its own basis, with its own ceiling arrangements. Payroll systems configured for social insurance alone understate the employer cost and produce incorrect net pay. It is the most common configuration error we see on transfer.
- Both contribution streams configured correctly from the first run
- Employer cost stated in full, not just salary and social insurance
- Year-end reporting and employee statements handled
20+
Mainland, free zone and offshore jurisdictions we file in — so the recommendation is based on your activity, not on which authority we happen to be registered with.
7,000+
Companies successfully established.
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What runs monthly
Payroll obligations in Cyprus
Tax plus two contribution streams.
| Item | Who pays | Frequency |
|---|---|---|
| Income tax withholding | Deducted from the employee | Monthly |
| Social insurance | Employer and employee | Monthly |
| Health system contributions | Employer and employee | Monthly |
| Other statutory funds | Employer | Monthly |
| Employee statements | Employer issues | Annually |
| Employer return | Employer files | Annually |
Contribution rates, ceilings, withholding bands and filing deadlines are set by the authorities and revised. Yours are applied as currently in force.
How it works
Running payroll properly
Configure once, correctly.
01
Set up
Employer registrations for each contribution stream, employee records built and withholding codes established.
02
Run the month
Payroll calculated with both contribution streams, payslips issued and contributions and withholding paid on time.
03
Close the year
Employee statements issued, the employer return filed and payroll reconciled to the accounting records.
- Employee details and start dates
- Contracts and agreed salaries
- Bank details for salary payment
- Social insurance numbers
- Tax codes and personal allowances claimed
- Hours and overtime worked
- Leave taken
- Benefits in kind provided
- Joiners and leavers in the month
- Prior payroll records on transfer
- Permit details for third-country staff
- Financial year end
Scope
What is included, and what is not
Stated plainly, so nothing is added once the engagement starts.
Included in the service fee
- Employer registrations for all contribution streams
- Monthly payroll calculation
- Payslip preparation
- Income tax withholding computation
- Social insurance and health contributions computed correctly
- Monthly payment submissions
- Annual employee statements and employer return
- Reconciliation to the accounting records
Not included, quoted separately
- Taxes and contributions, paid at cost
- Salaries and termination payments
- Bank transaction charges
- Penalties for periods before engagement
- Payroll software licences
- Recruitment
- Benefits administration
- Employment dispute handling
Verify independently
Official Cypriot authorities
We file directly with these bodies on your behalf.
Cyprus Securities and Exchange CommissionCentral Bank of CyprusCivil Registry and Migration DepartmentDepartment of LabourSocial Insurance ServicesIntellectual property offices
Questions
Cyprus payroll — FAQs
What makes Cypriot payroll different?
The separate national health system contribution, calculated on its own basis alongside social insurance. Systems configured for one stream only get both the cost and the net pay wrong.
Who pays the health contribution?
Employers and employees both contribute, with the rates and bases set by law. It is a genuine additional employer cost.
What does an employee really cost?
Salary plus social insurance, health contributions and other statutory employer funds. We calculate the full figure before you make an offer.
How often are contributions paid?
Monthly, alongside withheld income tax, with annual reporting on top.
Can you take over payroll mid-year?
Yes. We need year-to-date figures and contribution histories to carry forward correctly, and we check the existing configuration before the first run.
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