Payroll SaaS

Payroll Software in Cyprus

Aligned with Cyprus Payroll Regulations

Our Payroll Platform in Cyprus Supports You With

SEPA Payments
Generate Standard, Statutory and Year-End Reports

Statutory Filings
Custom API Integrations

Dive deeper into Cyprus

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Written by Global Payroll Team

Published on October 29, 2026

Last updated October 29, 2026

Expert Reviewed

Payroll Software in Cyprus

Mercans Payroll Software is a trusted solution for efficient, compliant, and streamlined payroll management in Cyprus. Designed to address the practical needs of Cypriot payroll, our software helps employers manage payroll processing, Tax Department Pay-As-You-Earn (PAYE) withholding, Social Insurance Services and General Health System (GESY) contributions, and Euro-denominated employee payments with confidence.

Mercans Payroll Software is an all-in-one native SaaS solution for complete digitalization of your payroll process. Supporting businesses across more than 160 countries, it is designed for organizations of all sizes, from single entities to global conglomerates. Its scalable architecture and seamless integration across modules enhance the user experience with an intuitive interface that is both simple and effective.

Trusted the world over

Aligned with Cypriot Payroll Regulations

Tax Department & Social Insurance Services

Our payroll software for Cyprus is designed in alignment with Cypriot statutory payroll reporting requirements and employer obligations involving authorities such as the Tax Department, which operates under the Ministry of Finance and administers Pay-As-You-Earn (PAYE) personal income tax withholding together with General Health System (GESY) contributions, and the Department of Social Insurance Services, which operates under the Ministry of Labour and Social Insurance and administers the Social Insurance Fund, Redundancy Fund, Human Resource Development Fund and Social Cohesion Fund. Built to support Cyprus’ monthly PAYE/GESY Statement of Monthly Deductions and the Social Insurance Services’ SIS Web File Upload declarations, the platform helps businesses manage progressive income tax, Social Insurance contributions, and Euro-denominated salary payments with confidence, reducing compliance risk and supporting accurate statutory reporting.

Why Choose Mercans

Native SaaS and payroll platform
Trusted by Fortune Global 500 companies and multinationals
Manage all employment types – employees, freelancers, contractors, expats
More than 100 inbound and outbound integrations are available today
Suitable for enterprise businesses
GDPR aligned, SOC 1 & SOC 2 compliant
Supports multiple currencies
ISO 20000 & ISO 27001 Certified
Global presence and multi-country payroll capabilities
OWASP ASVS aligned

Payroll Software Modules

Mercans Payroll Software offers managers and employees a powerful and intuitive online portal designed to streamline and enhance your HR and payroll activities.

Our advanced software modules are equipped with functionality to support efficiency, compliance, and a superior user experience. Learn about them here:

Manager Self Service

Empowers managers to handle HR tasks, including approvals, performance tracking, and employee management, directly from the platform.

Employee Self Service

Provides employees with direct access to their personal information, payroll details, and other HR resources, enhancing transparency and convenience.

Employee Help Desk

Offers a centralized support system for employees to address payroll and HR-related queries, ensuring quick resolution and improved satisfaction.

Data Exchange

Facilitates seamless integration with other systems and platforms through robust data exchange capabilities, streamlining data management and reducing errors.

eDrive and Workflows

Automates and streamlines HR processes with configurable workflows and document management, improving efficiency and compliance.

Time & Attendance

Tracks employee work hours, attendance, and productivity with precision, integrating seamlessly with payroll calculations.

Leave Management

Manages various types of employee leave, including vacation, sick leave, and other absences, with automated approval workflows and accurate tracking.

Loans & Expenses

Handles employee loans and expense claims, ensuring accurate processing and integration with payroll for seamless financial management.

Features of Payroll Software in Cyprus

Employment Contracts & Cyprus Labour Law

Our payroll software supports Cyprus’ employment framework, where a written employment contract is not always legally mandatory and terms are frequently set through collective agreements negotiated between trade unions and employers. Employees working more than eight hours a week for longer than a month must receive a written statement of their employment terms within a month of starting, covering details such as job role, start date and applicable collective agreement. Under the Transparent and Predictable Conditions of Employment Law 2023, the probationary period is now limited to a maximum of six months, and the software can be configured to reflect each employee’s contract type and length of service accordingly.

Euro & SEPA Salary Payments

Mercans Payroll Software for Cyprus supports processing salary payments in Euro (EUR) into employees’ local bank accounts. Cyprus has used the Euro as its official currency since 1 January 2008 and, as a member of the Single Euro Payments Area (SEPA), salary payments, statutory withholdings and employer remittances are processed through standard SEPA credit transfers to reflect local market practice.

You have two options:

Option1

Send generated salary payment details from Mercans Payroll Software to Mercans Gateway. The Financial Gateway will then handle the dispatch of payments to Cypriot banks via SEPA credit transfer, supporting locally compliant processing.

Option2

Prepare and process salary and statutory contribution payments directly through your bank from within Mercans, without the need to download a separate payment file.

Mercans facilitates both options to accommodate your payment processing needs efficiently.

Payroll Reporting

Mercans Payroll Software supports accurate and timely payroll data submission for Cypriot employer reporting obligations. It supports itemized payslip generation, retroactive adjustments, special pay runs, and the monthly Statement of Monthly Deductions covering Pay-As-You-Earn (PAYE) income tax and General Health System (GESY) contributions, together with the Social Insurance Services’ SIS Web File Upload declaration of Social Insurance, Redundancy Fund, Human Resource Development Fund and Social Cohesion Fund contributions.

Earnings and Deductions Calculation

Earnings: Global Payroll for Cyprus allows you to define and manage various types of earnings. This includes base salary components, overtime premiums (generally subject to negotiation between employer and employee, except in the retail sector where it is regulated), and discretionary 13th and 14th month salary payments where an employer has notified employees of their eligibility.
Deductions: The software also supports the definition and processing of different types of deductions. Regular deductions include progressive Pay-As-You-Earn (PAYE) income tax withholding and the employee’s mandatory Social Insurance and GESY contributions, while incidental deductions include salary advances and loans.

Taxes

Tax Calculation for Regular and Non-Regular Payments

Cyprus applies progressive monthly Pay-As-You-Earn (PAYE) income tax to the gross salary of tax resident employees, covering both regular monthly salary and non-regular payments such as 13th and 14th month salary and bonuses in the period they are paid, together with the employee’s Social Insurance and General Health System (GESY) contributions.

Personal Income Tax Thresholds and Rates

Cyprus’ personal income tax is progressive: income up to €19,500 is taxed at 0%, from €19,501 to €28,000 at 20%, from €28,001 to €36,300 at 25%, from €36,301 to €60,000 at 30%, and income above €60,000 at 35%. Tax residents are taxed on worldwide income, while non-residents are taxed only on income sourced within Cyprus; an individual is generally considered tax resident after spending more than 183 days in Cyprus in a tax year, or under the 60-day rule where additional conditions are met.

Social Security Contribution Rates

Effective 1 January 2024, Cyprus’ Social Insurance contribution rate is 8.8% of gross insurable earnings for both the employee and the employer. Employers additionally contribute 1.2% to the Redundancy Fund, 0.5% to the Human Resource Development Fund, and 2.0% to the Social Cohesion Fund, bringing total employer contributions to 12.5%. Social Insurance, Redundancy Fund and Human Resource Development Fund contributions are capped at maximum insurable earnings of €1,209 per week, €5,239 per month, or €62,868 per year, while the Social Cohesion Fund is calculated on actual earnings with no cap.

Minimum Wage & Annual Leave

Cyprus’ national minimum wage, revised from 1 January 2024, is €900 per month for new employees, rising to €1,000 per month after six months in the role. Employees are entitled to a statutory minimum of 20 days of paid annual leave per year, extending to 24 days for employees who also work Saturdays under their contract.

Tax & Social Security Reporting Deadlines

Employers must remit withheld PAYE income tax and GESY contributions via the monthly Statement of Monthly Deductions by the end of the month following the month worked, and declare and pay Social Insurance, Redundancy Fund, Human Resource Development Fund and Social Cohesion Fund contributions via the SIS Web File Upload system by the end of the following month. The annual TD7 return of employee salaries is due by 31 May.

Termination Notice & Severance

The statutory minimum notice period scales with length of service: none for under 26 weeks of service, rising through 1 week (26-51 weeks), 2 weeks (52-103 weeks), 4 weeks (104-155 weeks), 5 weeks (156-207 weeks), 6 weeks (208-259 weeks), 7 weeks (260-311 weeks), up to 8 weeks for 312 weeks or more of service. No notice is required during the probationary period.

Mercans payroll software for Cyprus efficiently manages and processes social security obligations. This encompasses

Social Insurance Registration

Registration of employers and employees with the Department of Social Insurance Services upon hiring the first employee, and timely enrollment following each new hire.

Contribution Calculation

Calculation of the employee’s and employer’s 8.8% Social Insurance contributions, together with the employer’s Redundancy Fund (1.2%), Human Resource Development Fund (0.5%) and Social Cohesion Fund (2.0%) contributions.

GESY Coordination

Coordination of General Health System (GESY) contributions withheld and remitted alongside PAYE income tax.

SIS Web File Upload

Generation of the Social Insurance Services’ SIS Web File Upload data required to declare Social Insurance, Redundancy, Human Resource Development and Social Cohesion Fund contributions.

Reporting

Integration of social security obligations into Cyprus’ Tax Department and Social Insurance Services reporting systems.

Mercans payroll software for Cyprus provides comprehensive tools for managing various types of employee absences

Annual Leave

Administration of the statutory minimum of 20 days of paid annual leave per year, extending to 24 days for employees who also work Saturdays under their contract.

Public Holidays

Tracking of Cyprus’ gazetted public holidays, including national and religious observances throughout the calendar year.

Maternity Leave

Management of the statutory maternity leave entitlement of 18 weeks, including 11 mandatory weeks with at least 2 weeks before the expected delivery date, paid at 75% of the employee’s insurable earnings and funded through Social Insurance.

Paternity Leave

Administration of statutory paternity leave of 2 weeks, extendable under certain circumstances, available to fathers without discrimination.

Parental Leave

Management of unpaid parental leave of up to 18 weeks per child under 8 years of age (23 weeks for a widowed parent), available after 6 months of employment with the same employer.

Overtime Pay Calculation

Our system calculates overtime in line with the applicable collective agreement or individual negotiation between employer and employee, with specific regulation applying to the retail sector, within the statutory weekly limit of 48 hours inclusive of overtime.

Bank Integration

Global Payroll for Cyprus integrates with Cypriot banking workflows to support secure and efficient payroll processing by automating Euro SEPA payment data and minimizing errors.

Payment Files

The software generates and stores the necessary payment files for Cypriot banks, covering Euro salary payments, Social Insurance and GESY contributions, and other deductions and benefits.

Statutory Allowances

Support for the calculation and payment of discretionary 13th and 14th month salary payments and other collectively agreed allowances.

Reporting

Generation of the Statement of Monthly Deductions and SIS Web File Upload files required for Tax Department and Social Insurance Services submissions.

Payroll Workflows

Streamlines payroll processes with automated workflows tailored to the needs of Cypriot businesses, enhancing efficiency and accuracy.

Social Security & GESY

Mercans payroll software for Cyprus efficiently manages and processes social security obligations. This encompasses

Social Insurance Registration

Registration of employers and employees with the Department of Social Insurance Services upon hiring the first employee, and timely enrollment following each new hire.

Contribution Calculation

GESY Coordination

Coordination of General Health System (GESY) contributions withheld and remitted alongside PAYE income tax.

SIS Web File Upload

Generation of the Social Insurance Services’ SIS Web File Upload data required to declare Social Insurance, Redundancy, Human Resource Development and Social Cohesion Fund contributions.

Reporting

Integration of social security obligations into Cyprus’ Tax Department and Social Insurance Services reporting systems.

Absence Management

Mercans payroll software for Cyprus provides comprehensive tools for managing various types of employee absences

Annual Leave

Administration of the statutory minimum of 20 days of paid annual leave per year, extending to 24 days for employees who also work Saturdays under their contract.

Public Holidays

Tracking of Cyprus’ gazetted public holidays, including national and religious observances throughout the calendar year.

Maternity Leave

Paternity Leave

Administration of statutory paternity leave of 2 weeks, extendable under certain circumstances, available to fathers without discrimination.

Parental Leave

Management of unpaid parental leave of up to 18 weeks per child under 8 years of age (23 weeks for a widowed parent), available after 6 months of employment with the same employer.

Overtime, Bank and Payment

Overtime Pay Calculation

Bank Integration

Global Payroll for Cyprus integrates with Cypriot banking workflows to support secure and efficient payroll processing by automating Euro SEPA payment data and minimizing errors.

Payment Files

The software generates and stores the necessary payment files for Cypriot banks, covering Euro salary payments, Social Insurance and GESY contributions, and other deductions and benefits.

Statutory Allowances

Support for the calculation and payment of discretionary 13th and 14th month salary payments and other collectively agreed allowances.

Reporting

Generation of the Statement of Monthly Deductions and SIS Web File Upload files required for Tax Department and Social Insurance Services submissions.

Payroll Workflows

Streamlines payroll processes with automated workflows tailored to the needs of Cypriot businesses, enhancing efficiency and accuracy.

Payroll Implementation

Mercans’ standard payroll implementation process for Cyprus is designed to ensure a smooth transition to our payroll system. This process is customized to meet the specific needs of each client, with timelines and deliverables varying based on complexity, data availability, and the number of parallel runs required. Below is an overview of the key steps involved in our implementation process.

Implementation Planning

Assign resources and define roles for the project. Conduct a kick-off meeting to outline objectives and confirm scope. Develop a detailed implementation calendar and plan. Provide a welcome package with project details and contacts. Schedule weekly update calls or emails to monitor progress. Obtain sign-off on the project scope.

Requirements Gathering

Hold workshops to understand client needs and document them. Complete business blueprinting to detail requirements and perform a gap analysis. Define and document any customization needs, including applicable pay scales and allowance structures. Obtain sign-off on requirements to ensure they meet client expectations. Establish a comprehensive list of payroll-specific requirements.

System Configuration

Set up configurations tailored to Cypriot payroll requirements. Customize the wage type catalog for relevant pay components, including 13th/14th month salary and collectively agreed allowances. Configure data dictionaries and necessary interfaces for PAYE, GESY and Social Insurance Services data integration. Adapt reports to meet Cypriot regulatory standards. Set up Employee Self-Service (ESS) and Manager Self-Service (MSS) features.

Data Migration

Migrate employee and payroll master data and confirm its accuracy. Obtain sign-off on the migrated data to ensure correctness. Verify data integrity and completeness before proceeding with further steps.

Test Payroll Run

Run simulation payrolls to validate system configurations and perform parallel runs with existing systems. Complete test run sign-offs to confirm accuracy and execute end-to-end testing. Conduct user acceptance testing (UAT) and address any issues found.

Payroll Management Transition & Sign-off

Develop a transition plan for moving to live payroll and provide training for users. Implement a hypercare plan for post-go-live support and an escalation plan for critical issues. Create a fallback plan for potential disruptions and complete a go-live checklist for final sign-off.

Payroll Integration

Mercans Global stands out with its extensive reach and robust integration capabilities. Operating across more than 160 countries, Mercans supports connections with payroll, tax, HR, finance, banking, and compliance ecosystems to help employers maintain efficient payroll operations in Cyprus.

Recognised Trust Sources

Tax Department & Social Insurance Services

Mercans’ integration capabilities are designed to support Cypriot payroll reporting processes and secure data exchange with connected systems, reflecting our commitment to global standards and best practices.

Integration with HCM/ HRMS/ Workforce management platforms

Mercans’ Payroll Software integrates seamlessly with most HCM and payroll software, creating a unified experience between HR administration and payroll processing. Through the Employee Self Service (ESS) feature, employees can directly handle their payroll tasks, such as submitting worked hours or declarations. Once approved, these entries are processed within the payroll system. This efficient integration reduces errors and enhances productivity for both employees and HR administrators.

Custom API Integrations

Mercans provides custom API integrations across diverse industries, including hospitality, catering, theme parks, transport, sports, construction, healthcare, events, promotional sectors, greenhouse horticulture, and fresh produce.

Xero Integration

Integrate Mercans payroll with Xero to sync data, automate HR tasks, and streamline processes. Save time, reduce errors, and focus more on growing your business.

Payroll Reports – Standard, Statutory and Year-End Reports

Mercans’ payroll software is equipped to generate a comprehensive range of reports to support both standard and statutory requirements. These reports provide transparency, accuracy, and ease of integration with financial and regulatory systems.

Mercans Standard Reports

Report	Description
Gross to Net Report	Details employee earnings, taxable wages, employee deductions, employer costs and net pay for each payroll run in Cyprus.
Payslip	Generates individual itemized payslips showing gross pay, allowances, deductions, Social Insurance and GESY contributions, and net pay.
Payroll Register	Provides the employee payroll register used to support Cypriot payroll administration and Social Insurance/GESY contribution calculations.
Statement of Monthly Deductions Report	Produces the per-employee PAYE income tax and GESY contribution data required for Cyprus’ monthly Statement of Monthly Deductions filing with the Tax Department.
Annual Payroll Summary	Generates the annual payroll summary for each employee, summarizing total compensation, statutory deductions and other year-end totals.
Bank Payment File (EUR/SEPA)	Creates a Euro SEPA salary payment file according to client or bank specifications for payroll disbursement.

Statutory Standard Reports

Report	Frequency	Description
Statement of Monthly Deductions	Monthly (by the end of the following month)	Statutory monthly filing and payment of withheld PAYE income tax and GESY contributions to the Tax Department.
SIS Web File Upload	Monthly (by the end of the month following the month contributions are due)	Declaration and payment of Social Insurance, Redundancy Fund, Human Resource Development Fund and Social Cohesion Fund contributions to the Department of Social Insurance Services.
TD7 Annual Return	Annually (by 31 May)	Electronic submission of the previous year’s employee salaries to the Tax Department.

Year-End Reports

Report	Frequency	Description
TD63 Emoluments Certificate	Annually	Annual certificate of employee emoluments and deductions, issued to employees before July to support their personal income tax return.

These detailed reports are designed to support statutory and regulatory requirements, helping ensure efficient payroll management and accurate compliance.

Benefits of Payroll Software

Mercans offers a powerful payroll solution that optimizes payroll administration and HR processes. Here’s how our software benefits your organization:

Streamlined Payroll Processing
Additional Key Features

No External Dependency

Manage payroll directly through our application, eliminating the need for third-party processors.

Integrated HR and Leave Management

Handle payroll, HR tasks, and employee leave requests within one platform, simplifying administrative duties.

Reduced Manual Work

Automate routine tasks to minimize errors and ensure accurate payroll processing.

Customization

Personalize workflows to meet your specific business needs, enhancing efficiency.

Time Savings

Redirect time saved from automation to more strategic activities.

Seamless Integrations

Connect effortlessly with systems and leading HR platforms like SAP Success Factors, Workday, and Oracle for a unified workflow.

Centralized Data Management

Consolidate employee data in one place for easy access, updates, and analysis.

Employee Access

Empower employees with 24/7 access to their personal files.

Mercans’ payroll software provides a comprehensive, secure, and user-friendly solution, streamlining payroll processes and allowing you to focus on your most valuable asset, your people.

24/7 Access

Access payroll data anytime and from any location.

Transparent Pricing

Benefit from a fixed monthly fee plus a per-employee charge with no hidden costs.

Dedicated Support

Get expert assistance and advice to maximize the software’s benefits.

Secure Data Management

Support data protection and integrity with secure online processing and controlled backup practices.

Compliance Assurance

Stay compliant with current fiscal and employment regulations through maintained payroll rules and updates.

Mercans’ payroll software provides a comprehensive, secure, and user-friendly solution, streamlining payroll processes and allowing you to focus on your most valuable asset, your people.

Streamlined Payroll Processing

No External Dependency

Manage payroll directly through our application, eliminating the need for third-party processors.

Integrated HR and Leave Management

Handle payroll, HR tasks, and employee leave requests within one platform, simplifying administrative duties.

Reduced Manual Work

Automate routine tasks to minimize errors and ensure accurate payroll processing.

Customization

Personalize workflows to meet your specific business needs, enhancing efficiency.

Time Savings

Redirect time saved from automation to more strategic activities.

Seamless Integrations

Connect effortlessly with systems and leading HR platforms like SAP Success Factors, Workday, and Oracle for a unified workflow.

Centralized Data Management

Consolidate employee data in one place for easy access, updates, and analysis.

Employee Access

Empower employees with 24/7 access to their personal files.

Additional Key Features

24/7 Access

Access payroll data anytime and from any location.

Transparent Pricing

Benefit from a fixed monthly fee plus a per-employee charge with no hidden costs.

Dedicated Support

Get expert assistance and advice to maximize the software’s benefits.

Secure Data Management

Support data protection and integrity with secure online processing and controlled backup practices.

Compliance Assurance

Stay compliant with current fiscal and employment regulations through maintained payroll rules and updates.

This content was prepared for informational purposes only. As local laws & regulations keep on changing, please consult your tax & legal advisors.

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FAQs

What payroll functions should a SaaS platform support in Cyprus (e.g., gross-to-net salary calculation, payslip generation, Tax Department PAYE withholding, and Social Insurance/GESY filings)?

Mercans payroll software for Cyprus delivers end-to-end payroll processing including automated gross-to-net salary calculation, itemized payslip generation, progressive Pay-As-You-Earn (PAYE) income tax withholding, Social Insurance and General Health System (GESY) contribution calculation, and the statutory filings required by the Tax Department and the Department of Social Insurance Services.

How do payroll SaaS solutions ensure compliance with Cypriot authorities (Tax Department, Social Insurance Services) and statutory reporting obligations?

Mercans supports compliance by keeping pace with Cyprus’ monthly Statement of Monthly Deductions submitted to the Tax Department, covering withheld PAYE income tax and GESY contributions, and the Social Insurance Services’ SIS Web File Upload declaration, with accurate monthly remittance deadlines that reduce the risk of late-payment interest and penalties.

What employer registration and employee data are required (e.g. Social Insurance Services registration, work permits for foreign staff) and how does payroll software assist with this?

Mercans automates onboarding by securely capturing and managing employer and employee data, including Tax Department and Department of Social Insurance Services registration upon hiring the first employee, work and residence permit details for non-EU staff, and the written statement of employment particulars required for employees working more than eight hours a week.

How does payroll software handle Cyprus-specific components like Social Insurance and GESY contributions, progressive income tax, and Euro/SEPA salary payments?

Mercans payroll software automatically calculates Cyprus’ progressive monthly PAYE income tax on gross salary, the employee’s and employer’s 8.8% Social Insurance contributions, the employer’s additional Redundancy Fund (1.2%), Human Resource Development Fund (0.5%) and Social Cohesion Fund (2.0%) contributions, and General Health System (GESY) contributions, together with Euro SEPA salary disbursement.

Can payroll SaaS integrate with Cypriot HR and ERP systems and support outsourcing or Employer of Record models?

Mercans offers robust integration capabilities with leading HR and ERP systems, supporting seamless payroll, HR management, and outsourcing models including Employer of Record, for full compliance and efficient management of your Cypriot workforce.