The Ultimate EU Holding
Calculate the true cost of employment in Cyprus. Updated for 2026 with the latest 8.8% contribution rates and maximum insurable earnings thresholds.
In Cyprus, Social Insurance is a significant component of the “Total Cost of Employment.” For 2026, the rates have increased as part of the government’s long-term sustainability plan. Understanding the difference between capped and uncapped contributions is critical for accurate payroll budgeting.
Social Insurance is paid on the gross salary of the employee, up to a specific ceiling. However, certain employer-only funds are exempt from this ceiling.
Strategic Note: Once an employee’s gross salary exceeds €5,742 in a month, no further Social Insurance is deducted for that month, except for the Social Cohesion Fund (2.0%), which the employer must continue to pay on the entire gross salary without limit.
| Contribution Type | Employee Rate | Employer Rate | Ceiling / Cap |
| Social Insurance | 8.8% | 8.8% | €68,904 |
| Social Cohesion Fund | 0% | 2.0% | No Cap (Uncapped) |
| Redundancy Fund | 0% | 1.2% | €68,904 |
| Industrial Training | 0% | 0.5% | €68,904 |
| GeSY (Healthcare) | 2.65% | 2.90% | €180,000 |
| TOTAL LOAD | 11.45% | ~15.4% | Varies |
If you are operating as a solopreneur (not through a Cyprus Limited company), you are responsible for the Self-Employed Social Insurance rate.
Your “insurable income” is determined by the Social Insurance Department based on your profession (notional income), though you can opt to pay on your actual higher earnings if desired.
Under the 2026 Audit Protocols, the Cyprus Tax Department and Social Insurance Department have integrated their databases. Accurate filing is no longer optional; it is a prerequisite for:
GeSY (General Healthcare System) is Cyprus’s universal health insurance.
Unlike social insurance, GESY contributions are applied to almost all forms of income, including dividends, interest, and rental income, but are capped at a significantly higher threshold of €180,000 per year.
Under the 2026 tax reform, which increases the personal income tax-free threshold to €22,000, founders have a unique opportunity to optimize their total “tax leak”:
For employees, GESY is 2.65% of gross earnings. Employers pay 2.90%. The maximum amount anyone pays per year is capped at an income of €180,000, meaning the absolute maximum employee contribution is €4,770 per year.
The maximum insurable earnings limit is currently €66,612 per year (or €5,551 per month). Salary earned above this threshold is not subject to social insurance contributions (excluding the 2% Social Cohesion Fund for employers).
Yes. Any individual employed by a Cyprus company must contribute to social insurance. These contributions entitle you to state benefits, including a Cyprus pension, provided you meet the minimum contribution years.
If a director is receiving a salary for their services, they are treated as an employee and must pay both social insurance and GESY. If the director only receives dividends and no salary, they only pay the 2.65% GESY on those dividends (capped at €180k).
Self-employed individuals must register with the Social Insurance Department and pay their contributions quarterly based on their “estimated” income, which is categorized by professional sector. The rate is a flat 16.6%.
The ceiling is adjusted annually based on the inflation index. For 2026, the ceiling for Social Insurance contributions is approximately €63,000 per annum. Contributions for GeSY, however, are capped much higher at €180,000.
No. Self-employed individuals pay a flat rate of 16.6% on their insurable earnings. For most high-earning expats, forming a Cyprus LTD and paying yourself a salary is more tax-efficient than remaining self-employed.
Yes. GeSY is a mandatory universal healthcare contribution. Even if you maintain private medical insurance, you (and your employer) must contribute the 2.65% / 2.90% by law.
Don’t risk penalties in the 2026 audit window. Secure your payroll compliance and optimize your take-home pay today.
