Setting up and running payroll in Cyprus
If you are planning a Cypriot expansion, one of your first steps will be hiring a local workforce. To do this you will generally need a legal entity in the country and will need to establish an in-country payroll and employment infrastructure. This can be a long and difficult process in many cases, taking several months to complete and causing delays.
One way to bypass the process of setting up payroll in Cyprus is to outsource the complex administrative work and ongoing management. At New Horizons, we will establish and run your Cyprus payroll, ensuring full compliance with local legislation. Our outsourcing services are perfect for organizations with or without a Cyprus-based entity.
Why choose the New Horizons payroll solution?
If you have an entity
If your company already has a legal entity registered in Cyprus, then New Horizons’ experts can help you with the next steps. Our team will set up and manage your payroll, as well as any associated HR and compliance work to help you focus on the important job of expanding your business in Cyprus.
If you don’t have an entity
If you haven’t set up an entity in Cyprus, our Cypriot subsidiary can work as your employer of record. Our team will handle all of your payroll, contracts, associated legal work, and associated administration, helping you focus solely on a successful expansion.
This service is ideal for any organization aiming for full flexibility and low risk while expanding into Cyprus. You will remain autonomous and have full control over your Cypriot workforce while not having to deal with any of the complex administration and compliance work.
Expanding your business in Cyprus with New Horizons
Cyprus payroll guide
Taxation and withholdings in Cyprus
Employers and employees must make various mandatory contributions. Both must pay 7.8% to social insurance. Additionally, employers must pay 0.5% to the Industrial Training Fund 2% to the Social Cohesion Fund, 1.2% to the Redundancy Fund.
Income tax in Cyprus is progressive, ranging from 0% to 35% depending on income level.
Entitlements and terminations in Cyprus
The mandatory minimum notice periods of termination depend on the employee’s length of service with their employer. For between six and 12 months of service, the notice period is one week. This entitlement gradually rises up to eight weeks of notice after six years of service.
Severance payments also vary depending on the employee’s length of service. For up to four years of service, the payment is two weeks of pay. This increases up to four weeks of pay for employees with over 20 years of service.
Standard probation periods are limited to six months, but may be as long as two years if agreed upon by the employer and employee.
How to establish a Cyprus payroll
You may choose to establish an internal payroll in Cyprus, but this is a time-intensive option that can be very difficult to execute in practice, with language barriers, cultural differences, and frequently changing regulations getting in the way. The simplest option is to outsource your Cyprus payroll setup and management.
Alternatively, you can outsource the setup and management of your payroll to New Horizons. We will ensure that your expansion into Cyprus is as simple as possible, helping you get started in the county faster and more efficiently. Additionally, we can offer our employer of record service, so even organizations without an in-country can benefit from our outsourcing services.
Your all-in-one solution for payroll outsourcing and Cyprus expansion
New Horizons’ Cyprus payroll, PEO, and employer of record services give your business everything you need to begin trading in Cyprus in as little as 48 hours, whether or not you have an entity already registered in the country, and could even save you more than 80% in expansion costs.
Our team of Cyprus expansion experts can also take care of your company’s payroll, benefits, and any other associated administration in the country. As the only global PEO with an in-house recruitment team, New Horizons can also source, recruit, and onboard your local employees, giving you more capacity to focus on your expansion efforts.