Skip to main content
Mercans Logo
SUBMIT RFP CONTACT US
Cyprus countryintel banner
Country Intel

Employer of Record/PEO and Payroll Services in Cyprus Cyprus flag

mercans logo

Mercans-owned legal entity
union We have our own legal entity to protect your business from risk and provide you and your employees with a distinctive experience.

Services available

  • Employer of record
  • Contractor management
  • Global payroll
  • In-country payroll
Global Payroll Team
Written by Global Payroll Team
Last updated May 7, 2026
Expert Reviewed
Payroll in Cyprus
Tax in Cyprus
Immigration in Cyprus

Cyprus map

eor

Employer of Record/PEO and Payroll Services in Cyprus

At the crossroads of Europe, Africa and Asia, Cyprus is a strategic midpoint linking three continents. Encouraging foreign direct investment in priority economic growth sectors, Cyprus continues to promote reform initiatives and investment opportunities. With advanced infrastructure and a strong services base, Cyprus remains an important regional business, financial and energy hub in the Eastern Mediterranean.

eor

Doing Business in Cyprus

Despite its small size, Cyprus’ productive labour force, business-friendly environment and location as a gateway to the European Union continue to make it attractive to international investors and employers.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Cyprus is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banks are open from Monday-Thursday 8am-2:30pm and Friday from 8 am-2 pm

Working Week

The standard working week is 40 hours per week usually worked from Monday to Friday, 8 hours per day.

Labor Law

Cyprus’ legal system is fully aligned with European Union requirements. Terms and conditions of employment of foreign nationals must generally be no less favorable than those applicable to Cypriot nationals under the relevant legal and administrative framework.

Main Industries

Tourism, financial and professional services, shipping, food and beverage processing, cement and gypsum, energy and technology

GDP Growth

3.8%

Dates & Numbers

dd/mm/yyyy

Official State Name

The Republic of Cyprus

Population

1.37 million

Capital

Nicosia

Major Languages

Greek, Turkish

Currency

Euro

Internet Domain

.cy

International Dialing Code

+357

loader-image
Cyprus
Nicosia, CY
11:56 am, May 15, 2026
26°C
scattered clouds
34 %
Wind Gust: 0 mph
Clouds: 40%
Sunrise: 5:42 am
Sunset: 7:43 pm

eor

Payroll

Salary and other benefits are not generally fixed by law, except where a statutory minimum wage or sector-specific rules apply. Cyprus now has a national minimum wage framework for covered full-time employees, while salary and additional benefits above statutory minima remain a matter for agreement between employer and employee.

It is acceptable to provide employees with online payslips.

Payslip

Payroll records should generally be retained in line with tax, social insurance and employment recordkeeping requirements.

Reports

20 working days

Annual Leave

Employees may qualify for statutory sick leave benefit from Social Insurance for up to 156 days, subject to eligibility conditions and medical certification.

Sick Leave

18 weeks of paid maternity leave and 2 weeks of paid paternity leave

Maternity & Paternity Leave

1 week

Employee Termination

While not compulsory, employees can be paid in December

13th month salary

979 EUR gross per month on recruitment and 1088 EUR gross per month after 6 months of continuous employment

Minimum Wage

All hours in excess of 40 hours a week are paid at an overtime compensation rate, subject to the employment terms and applicable sector rules.

Overtime

2 weeks’ wages for each year of service up to 4 years

Severance Pay

PEO Cyprus

Mercans PEO (Professional Employer Organization) services in Cyprus provide a comprehensive HR outsourcing solution for foreign companies to establish a local presence, compliantly hire and manage employees, handle HR, payroll, benefits, tax compliance, and other administrative tasks, while reducing costs and administrative burden.

Through our Cyprus PEO, we provide services that are flexible and cost-effective for companies seeking to outsource their HR and payroll processes. As a Professional Employer Organization, Mercans offers a range of services including employee benefits, payroll administration, and compliance with Cyprus employment laws. By entrusting their HR and payroll needs to Mercans, companies can focus on their core business activities and ensure a smooth and efficient HR operation.

Partnering with our Cyprus PEO presents the fastest and most efficient way to enter the Cyprus market.

Contact us to explore how PEO Cyprus solutions from Mercans can support your seamless expansion!

Benefits of Hiring an employee through a PEO Cyprus

Looking to expand your business into the Mediterranean region? Partnering with a PEO in Cyprus offers a quick, efficient, and compliant way to hire local talent while avoiding the complexities of setting up a legal entity. Here’s how a Cyprus PEO can support your business growth:

Fast and Easy Market Entry

A PEO Cyprus allows you to hire employees and start operations within days, bypassing the need to establish a local legal entity. This allows your business to enter the Cyprus market quickly and efficiently, while focusing on growth.

Full Compliance with Local Laws

Cyprus has its own set of employment regulations, covering aspects such as contracts, benefits, and social insurance contributions. A Cyprus PEO ensures that all aspects of your employee management are in compliance with local labor laws, protecting your business from potential fines or legal issues.

Cost-Effective Operations

Establishing a business in Cyprus involves significant setup costs. A PEO in Cyprus helps you reduce overhead by handling payroll, benefits, tax filings, and HR administration, enabling you to operate more cost-effectively without the need for an extensive local infrastructure.

Legal Risk Reduction

Cyprus employment laws can be complex, especially regarding taxation and social security requirements. A Cyprus PEO stays up to date on the latest regulations, ensuring that your business operates within the law and minimizing the risk of costly legal issues.

Access to Local Talent

Cyprus offers a highly skilled and educated workforce, particularly in finance, technology, and tourism. By partnering with a PEO in Cyprus, you gain access to top local talent that is well-versed in the regional market and ready to contribute to your business’s success.

Simplified HR and Payroll Management

Managing payroll, benefits, and employee relations can be challenging when operating internationally. A PEO Cyprus handles all these responsibilities for you, ensuring that your employees are paid on time, that benefits are administered correctly, and that you remain compliant with local regulations.

Scalable Hiring Solutions

Whether you’re hiring a single employee or planning to expand your team, a Cyprus PEO provides flexible staffing solutions that can scale with your business. You can quickly adjust your workforce as needed, making it easier to adapt to market conditions.

”

eor

Tax and Social Security

Cyprus offers an attractive and transparent tax regime, fully compliant with EU, OECD and international laws and regulations. Cyprus maintains a corporate tax rate of 12.5%, one of the lowest in the EU. The social security system provides benefits including maternity allowance, sickness benefit, old-age pension, benefits for employment accidents and occupational diseases and more.

Tax

Companies that operate global payroll and maintain a presence in multiple locations should take note that attractive features of the Cyprus tax system include the participation exemption in certain cases, no withholding tax on dividends and interest in many outbound situations, no inheritance tax and an attractive intellectual property regime.

12.5%

Corporate Income Tax

35%

Personal Income Tax

19%

Sales Tax

19%

VAT

Social Security

Contributions are made by employed and self-employed persons, with employers making contributions for their employees. Employees and employers each contribute 8.8% to social insurance, while employers also contribute to the Redundancy Fund, Industrial Training Fund and Social Cohesion Fund, and to the Holiday Fund where applicable.

17.6%

Social Security Rate

12.5%+

Social Security Rate for Employers

8.8%

Social Security Rate for Employees

eor

eor

Employment Law

There are different categories of workers. An employee is someone who works for another person under a contract of employment. Independent contractors or the self-employed are those for which an employment relationship cannot be inferred. Contingent workers are usually temporary employees employed for a fixed period of time but such a person may also be an independent contractor.

Employment Agreement

A written employment contract is not strictly required in Cyprus. However, the law imposes an obligation on the employer to provide the employee with specific details regarding their employment. This includes their position, start date, notice period, leave entitlements and more.

Working condition

The law does not distinguish between the rights of temporary workers and permanent employees. The law also prohibits discriminatory behaviour towards part-time employees. Cyprus has also adopted work-life balance measures and related rights for eligible employees.

Leaves

All employees are entitled to at least four weeks of paid leave per year and this requirement cannot be replaced with cash, except on termination of employment. Employers in the private sector are not generally legally obligated to give additional paid leave on public holidays, although this is common practice. Employers are not generally legally obligated to pay sick leave directly, while eligible employees may claim statutory sick leave benefit from Social Insurance.

Employment termination

The notice period for termination is governed by the Termination of Employment Law 1967. Severance and redundancy payments are calculated according to the number of years of employment and the applicable legal basis for dismissal. Dismissals must also be justified on lawful grounds, failing which the employee may be entitled to compensation.

eor

1 week

Minimum notice period for terminating an employee

eor

15

Total number of public holidays

eor

40

Working hours per week

eor

3-5 days

Total number of days for Compassionate & Bereavement Leave

eor
eor

Immigration

Typically, the employment of third-country nationals in Cyprus depends on the relevant immigration category and labour market requirements. Work authorization may be granted where the applicable conditions are met, and the terms and conditions of employment of foreigners should generally be the same as those for Cypriots.

eor

Residency permits

Applications for entry and work permits are submitted through the Migration Department and the competent labour authorities, depending on the route. Cyprus also has special categories for companies of foreign interests and other specific employment categories.

Work Permit validity

Up to 3 years in many categories, and longer in certain approved categories

Required Documents

Any employment of third country nationals in Cyprus companies with foreign interests shall require the company to apply through the Civil Registry and Migration Department (CRMD) and provide the following supporting documents:

  • Company’s original incorporation documents signed and stamped by the Registrar of Companies
  • Description of the company’s activities and business
  • List of the employees currently working at the company
  • Proof of the deposited amount of at least EUR200.000, supported by a bank SWIFT indicating that the initial investment was legally admitted to Cyprus from abroad
  • Original bank statement showing the required minimum balance where applicable
  • Title deed or lease agreement of the office in which the company is operating
  • Audited company accounts
  • Tax clearance certificate for the company
  • Proof of payment of the Annual Levy to the Registrar of Companies

Compliant, reliable, error-free and touchless payroll in Cyprus

Build the best team and hire top talent compliantly in Cyprus. Get in touch with Cyprus payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
Tell us where you want to grow.
Our team regional experts are here to support you with global expansion plans.

    I’m interested in

    Sample message

    1. We want to expand in $country

    2. We want you to employ 'X' number of employees on our behalf

    3. Contract duration – 3/6/9/12/18/24 months

    4. Number of legal entities (if any exist today)

    5. Employment type: EOR employee or contractor?

    6. Any benefits requirement or “standard statutory only”?

    FAQs

    What is an Employer of Record (EOR) in Cyprus and how does it work for foreign companies?

    An Employer of Record (EOR) in Cyprus enables international businesses to employ staff legally without having to set up their own local entity. The EOR manages employment contracts, payroll, taxes, social insurance, and compliance with Cypriot labor regulations. This allows foreign companies to operate in Cyprus efficiently while focusing on their core business goals.

    Why should businesses use an EOR instead of establishing a legal entity in Cyprus?

    Partnering with an EOR saves time and reduces the cost of forming a local company. It provides immediate access to the Cypriot market, simplifies HR administration, and ensures full compliance with employment and tax laws. This solution is particularly beneficial for organizations exploring the market or managing a limited number of employees in Cyprus.

    How does payroll outsourcing in Cyprus ensure compliance with local tax and labor laws?

    Payroll outsourcing through a trusted provider ensures that employee payments, tax deductions, and social insurance contributions are processed accurately and on schedule according to Cypriot legislation. It minimizes compliance risks, avoids penalties, and gives companies peace of mind knowing that their payroll operations meet all regulatory requirements.

    Can an Employer of Record in Cyprus hire employees and manage work permits for international companies?

    Yes, an EOR in Cyprus can legally employ staff on behalf of foreign companies and assist with obtaining the necessary work and residence permits. The EOR oversees all HR, payroll, and immigration-related processes, allowing international businesses to expand into Cyprus without the administrative burden of local entity management.

    What are the key benefits of using EOR and payroll services in Cyprus for global expansion?

    EOR and payroll services in Cyprus provide rapid market entry, full legal and tax compliance, reduced operational costs, and access to local HR expertise. These services enable companies to scale their international workforce smoothly while maintaining focus on growth and business development.

    Learn how we can help you comply with Local labor law
    Discover the best-in-class Payroll solution
    Countries we serve
    Locate Mercans in Cyprus