Cyprus employer Social Insurance contributions total approximately 15.4% above gross salary, capped at €66,612 per year per employee. Before any employee starts work, the employer must register them in ERGANI via the Social Insurance portal at online.mlsi.gov.cy — there is no grace period. Monthly contributions are due by the last day of the following month.
Cyprus employer social insurance contributions are 8.8% of gross salary for the General Social Insurance Scheme, plus an additional 2.9% for other funds — totalling 11.7% employer cost on top of salary.
Employer Contribution Rates for 2026
| Contribution | Employer Rate | Employee Rate | Annual Cap |
|---|---|---|---|
| Social Insurance | 8.8% | 8.8% | €66,612/year |
| GESY (health) | 2.90% | 2.65% | €200,000/year |
| Social Cohesion Fund | 2.00% | — | No cap |
| Redundancy Fund | 1.20% | — | €66,612/year |
| HRDA (training levy) | 0.50% | — | €66,612/year |
| Total employer | ~15.40% | 11.45% | — |
Note: Holiday Fund (8%) applies only to hotels, construction, and certain other sectors.
What This Costs: A Worked Example
An employee earns €2,500 gross per month.
| Cost Component | Monthly Amount |
|---|---|
| Gross salary | €2,500.00 |
| Social Insurance (8.8%) | €220.00 |
| GESY (2.90%) | €72.50 |
| Social Cohesion Fund (2%) | €50.00 |
| Redundancy Fund (1.2%) | €30.00 |
| HRDA (0.5%) | €12.50 |
| Total employer cost | €2,885.00 |
| Additional cost above salary | +15.4% |
Annually, this employee costs the company €34,620 in salary plus €4,620 in employer contributions = €39,240 total.
ERGANI: Pre-Employment Registration (Critical)
Before any employee begins work — even for a single day trial — the employer must register them in ERGANI. There is no grace period and there are no exceptions.
ERGANI registration steps:
- Go to online.mlsi.gov.cy
- Log in with your employer Social Insurance credentials
- Navigate to "ERGANI" → "New Employee Declaration"
- Enter the employee's details: full name, ID/passport number, Social Insurance number, job title, start date
- Submit before the employee's first day
If the employee does not have a Cyprus Social Insurance number yet: They must register for one at the Social Insurance district office. This takes time, so plan ahead for new hires who are not yet registered in Cyprus.
Penalties for missing ERGANI: The Labour Inspectorate can impose significant fines and the unregistered employment period may not count towards the employee's Social Insurance record.
Monthly PAYE and Social Insurance Payment
Employer Social Insurance contributions and the corresponding employee deductions must be paid monthly by the last working day of the following month:
| Salary Month | Payment Deadline |
|---|---|
| January | Last day of February |
| February | Last day of March |
| March | Last day of April |
| ... | ... |
| December | Last day of January (next year) |
Payment is made via the Social Insurance portal (online.mlsi.gov.cy) or JCCSmart. Note that Social Insurance payments are separate from PAYE income tax payments, which go through TFA.
Calculating Monthly Social Insurance
For an employee earning €3,000 gross:
| Employee deductions | Amount |
|---|---|
| Social Insurance (8.8%) | €264.00 |
| GESY (2.65%) | €79.50 |
| Income tax (PAYE — varies) | Depends on annual income |
| Net salary paid to employee | €3,000 – deductions |
| Employer contributions | Amount |
|---|---|
| Social Insurance (8.8%) | €264.00 |
| GESY (2.90%) | €87.00 |
| Social Cohesion (2%) | €60.00 |
| Redundancy (1.2%) | €36.00 |
| HRDA (0.5%) | €15.00 |
| Total employer contributions | €462.00 |
The Social Insurance Cap in Practice
Social Insurance (8.8% employer + 8.8% employee) is capped at €66,612 annual salary per employee. Once an employee's gross salary reaches €66,612 in a calendar year (€5,551/month), no further Social Insurance contributions are due for that year on the Social Insurance element.
Example: An employee earning €8,000/month reaches the €66,612 cap at the end of August. From September onwards, no Social Insurance (8.8%) is paid by either party — only GESY, Social Cohesion, and Redundancy Fund continue.
Owner-Directors: A Special Case
Many Cyprus companies have the owner as the sole or main director and also the sole employee. In this case:
- If you pay yourself a salary, both the employer (company) and employee (you) pay contributions as above
- If you pay yourself only dividends (no salary), there are no Social Insurance contributions at all
The decision between salary and dividends has significant financial and social security implications. See our GESY and dividends guide for the financial analysis. Key consideration: taking a salary builds your pension and social insurance entitlement; dividends-only does not.
Social Insurance Portal: Employer Registration
Before you can register employees, your company must itself be registered as an employer:
- Go to online.mlsi.gov.cy
- Register your company as an employer (first-time only)
- Provide company HE number, TIC, registered address, nature of business
- Receive employer Social Insurance registration number
Registration should be done before the first employee's start date.
Penalties for Late Social Insurance Payments
| Violation | Penalty |
|---|---|
| Late payment | 3% per month on amount due |
| Interest | Additional interest charges |
| Long-term non-payment | Legal proceedings and registration of charge |
The 3% per month penalty for late Social Insurance payment is significantly higher than most other tax penalties in Cyprus.
Social Insurance compliance for employers is complex and the pre-employment ERGANI obligation is strictly enforced. For payroll management and monthly filings, find a bookkeeper or payroll specialist in Cyprus or a full-service accountant.