When you hire someone in Cyprus, the gross salary on their contract is not your total cost. On top of that gross, the employer pays mandatory contributions totalling roughly 14.9%. This guide breaks down each fund, its rate, its cap and what it actually pays for.
Calculate employer cost →| Fund / contribution | Rate | Cap (annual earnings) |
|---|---|---|
| Social Insurance | 8.3% | €68,904 |
| Redundancy Fund | 1.2% | €68,904 |
| Industrial Training Fund (HRDA) | 0.5% | €68,904 |
| Social Cohesion Fund | 2.0% | No published cap |
| GESY / GHS (healthcare) | 2.9% | €180,000 |
| Total employer contributions | ~14.9% |
These rates are for 2026. Social Insurance, redundancy and training are calculated on insurable earnings up to €68,904 per year. GESY is on emoluments up to €180,000. The social cohesion fund is levied on total emoluments without a published ceiling.
This is the employer's share of the Social Insurance contribution. The employee also pays 8.8% of their own salary. Together, these fund state pensions, sickness and maternity benefits, unemployment benefits, and work-injury benefits. The cap is €68,904 of insurable earnings per year — earnings above that are not subject to Social Insurance.
The Redundancy Fund pays statutory redundancy (severance) payments to employees who are dismissed due to redundancy. The employer contribution is 1.2% of insurable earnings (same cap as Social Insurance). There is no employee contribution to this fund — it is entirely employer-funded.
The Human Resource Development Authority (HRDA / ΑνΑΔ) levy funds vocational training programmes in Cyprus. Employers pay 0.5% of insurable earnings. In return, employers can apply for HRDA subsidies to co-fund training and development programmes for their staff.
Introduced in 2019, the Social Cohesion Fund finances social policy measures including the guaranteed minimum income (GMI) scheme. The employer pays 2.0% of total employee emoluments. Unlike the other funds, it does not have the same insurable-earnings cap — it applies to total emoluments.
The employer's GESY contribution is 2.9% of emoluments, capped at €180,000 per year. This funds Cyprus's universal healthcare system. The employee also contributes 2.65% of their own salary. Self-employed persons, pensioners and the state also contribute to the system.
If you hire someone at a gross annual salary of €30,000:
| Item | Amount |
|---|---|
| Gross salary | €30,000 |
| Social Insurance (8.3%) | €2,490 |
| Redundancy Fund (1.2%) | €360 |
| HRDA (0.5%) | €150 |
| Social Cohesion (2.0%) | €600 |
| GESY (2.9%) | €870 |
| Total cost to employer | €34,470 |
That is €4,470 on top of gross, or about 14.9%. For employees earning above the insurable earnings cap (€68,904), the Social Insurance, redundancy and training contributions stop growing, but GESY and social cohesion continue up to their respective limits.
The salary calculator includes an "employer cost" toggle under Advanced options that shows the full cost to the employer alongside the employee's net take-home.
For reference, the employee's own deductions are:
The employee does not pay into the redundancy fund, industrial training fund or social cohesion fund — those are employer-only costs.
Beyond the mandatory contributions above, employers should budget for:
On top of the gross salary, the employer pays approximately 14.9% in mandatory contributions (Social Insurance, redundancy, training, social cohesion and GESY). An employee earning €30,000 gross costs the employer roughly €34,470 in total.
The employer's Social Insurance rate is 8.3% of insurable earnings, capped at €68,904 per year. This is separate from the employee's own 8.8% contribution.
Social Insurance, redundancy and training are capped at the insurable earnings ceiling (€68,904/year). GESY is capped at €180,000. The social cohesion fund has no published cap.
No. Income tax (PAYE) is withheld from the employee's salary and remitted to the tax department, but it is the employee's tax — not an additional employer cost.
If the employment contract or collective agreement provides for a 13th or 14th salary, then yes — it is an additional month of gross pay plus the employer contributions on that amount. It is not a statutory requirement for all employers.