In Cyprus, all companies-employers, as well as employees of the companies and individual entrepreneurs must be registered with the social insurance system and pay contributions to the State Social Insurance Fund.

Registration in the Cyprus Social Insurance system is possible in person at the office of the Social Insurance Service at the place of residence (location) of the person concerned or online through the PSC Cyprus Portal. Individuals and self-employed individuals submit a signed YKA1-001 application form to Social Insurance.

The employer company submits a set of the following documents to the Social Insurance Service:

  1. Signed YKA1-008 application form.
  2. Copies of the statutory documents of the company.
  3. Office lease agreement and utility bill in the name of the company at the registered address.
  4. Latest financial statements of the company, the income statement for the previous financial year, IR4 declaration of the company.
  5. Copies of the company registration certificates in the VAT system and VAT returns (if any).
  6. Declaration of employment (YKA1-003 form).
  7. YKA1-021 and YKA1-023 forms (filed if the company intends to pay Social Insurance contributions online).

Contributions to the Social Insurance Funds and National Health Insurance Fund of Cyprus (ΓεΣΥ) constitute:

I. For the company-employer:
  • Social Insurance Fund – 8.3% (from 2019, with the deductions increasing by 0.5% every 5 years).
  • Holiday Fund – 8% (this rate is applied based on 20 vacation days for the employees working 5 days a week and 24 days for the employees working 6 days a week).
  • Redundancy Fund – 1.2%.
  • Industrial Training Fund – 0.5%.
  • Social Cohesion Funds – 2%.
  • Health Fund (ΓεΣΥ) –2.90%.
II. For the employees:
  • Social Insurance Fund – 8.3% (from 2019, with the deductions increasing by 0.5% every 5 years).
  • State Health Insurance Fund (ΓεΣΥ) – 2.65%.
III. For the self-employed individuals:
  • Social Insurance Fund – 15.6% (from 2019 with the deductions increasing by 1.00% every 5 years).
  • State Health Insurance Fund (ΓεΣΥ) – 4.00%.

The maximum annual gross income from which the Social Insurance contributions are made amounts to €54,864.

Social Insurance contributions are paid by the employer by the end of the calendar month following the month for which the contributions are due. If the last calendar day of the month of payment of the contributions is a non-working day, then the payment of the contributions is carried out on the first following working day.

With regard to the contributions to the National Health Insurance Fund of Cyprus there are the following nuances:

  1. Employee contributions to the National Health Insurance Fund are deducted by the employer from the total earnings of the employee (as defined in the Social Security Act) and, together with the employer's contributions, are paid to the Social Insurance Fund, as in the case of the corresponding contributions to the Social Insurance Fund. The maximum annual employee insurance pay applied for the purpose of Social Insurance contributions does not apply in the case of ΓεΣΥ.
  2. Contributions of the self-employed persons to ΓεΣΥ for the amounts of the insured income provided for the contributions to the Social Insurance Fund are paid to the Social Insurance Fund, and contributions from the income of the self-employed persons in excess of these amounts are paid to the Tax Office.
  3. Pension contributions to ΓεΣΥ are withheld by the pension payer and paid to the Tax Office, with the exception of the pensions paid to the pensioners by the Social Insurance Fund, from which the contributions are deducted from the pension by the Social Insurance Fund and paid to ΓεΣΥ. Pension contributions received from abroad are paid to the Tax Office by the recipient pensioner himself.
  4. Contributions to ΓεΣΥ from the salaries of the officials are withheld by the republic or the payer and paid to the Tax Office.
  5. Contributions to ΓεΣΥ from the rent received by an individual from sources in Cyprus are deducted by the payer, provided that the payer is a company, partnership, the Republic of Cyprus or local authority (as in the case of the special contribution for defense), and payable to the Tax Office.
  6. Contributions to ΓεΣΥ on the dividends or interest received by an individual from sources in Cyprus are deducted by the payer (as in the case of the special contribution for defense from the related income) and paid to the Tax Office.
  7. Contributions to ΓεΣΥ from income from abroad or from any other income not mentioned above are paid to the Tax Office by the person who receives them.
  8. Contributions to ΓεΣΥ from the rent received by an individual from sources in Cyprus by another natural person and for which no deduction is made in accordance with paragraph 6 above shall be paid to the Tax Office by the person who receives the rent.
  9. The total annual income of an individual from which the contributions to ΓεΣΥ are paid amounts to €180,000.