The Social Insurance Contributions in Cyprus
The Employers in Cyprus are obliged by the Legislation to calculate the Social Insurance Contributions based on the monthly emoluments of their Employees and pay them (including the employee's share) within a month of the applicable contribution period. To do so employers must withhold the employees' contributions from their monthly emoluments/salaries.
From 1 January 2014 onwards the Social Insurance Contribution Rates are as follows:
|Social Cohesion Fund||2%||Nil|
|Holiday Fund (if not exempt)||8%+||Nil|
The Social Insurances, Human Resources, Redundancy Fund and Holiday Fund are restricted to a maximum amount of €54,396 (weekly €1,046 / monthly €4,533).
The Social Cohesion fund is calculated on the total monthly emoluments and has no maximum level. In addition it is not considered as a tax allowable expense for corporation tax purposes.
Self-employed individuals are obliged to contribute to the social insurance system every 3 months. Their contributions are 14.6% (2013: 12,6%) based on the minimum insurable earnings of the individual and are payable 40 days after the end of the quarter. (see TABLE B)
Self-employed persons make the same contributions for social insurances as the employees, but given the fact that they don't have an employer they pay both the employee's (7.8%) and the employer's contributions (7.8%).
The minimum WEEKLY insurable earnings for each self employed person are shown in TABLE A below. For example a person that belongs to Category 1A will have to pay €383,64 X 13 weeks X 14.6% = €728.15 every quarter.
Since the contributions are calculated on a weekly basis and some quarters might have 12 or 13 or 14 weeks, the quarterly contributions are not always the same.
TABLE B below shows how much contributions the self-employed persons have to make for every quarter of 2015 based on the minimum insurable earnings of their profession.
Minimum Weekly Ins. Earnings
|1A||Doctors, Pharmacists, Health Experts (graduates) for a period not exceeding 10 years||383.64|
|1B||Doctors, Pharmacists, Health Experts (graduates) for a period exceeding 10 years||775.99|
|2A||Accountants, Economists, Lawyers and Other Professionals for a period not exceeding 10 years||383.64|
|2B||Accountants, Economists, Lawyers and Other Professionals for a period exceeding 10 years||775.99|
|3||Businessmen, Estate Agents, Wholesalers||775.99|
|4A||Professors / Teachers (University, Secondary Education, Elementary Education, Preschool, Teacher Assistants, Specialist Teachers) for a period not exceeding 10 years||374.92|
|4B||Professors / Teachers (University, Secondary Education, Elementary Education, Preschool, Teacher Assistants, Specialist Teachers) for a period exceeding 10 years||749.83|
|5||Builders and similar occupations in the construction industry.||470.83|
|6||Agriculturists, Ranchers, Poultry Producers, Fishermen and other similar occupations.||261.57|
|7||Drivers, Excavator Operators and other similar occupations.||374.92|
|8||Technical Assistants, Media Partners, Operators of machinery not related to the construction industry and Assemblers of Metal, Rubber, Plastic, Wood and similar products.||374.92|
|9||Clerks, Typists, Cashiers, Secretaries.||374.92|
|10||Technicians that are not subject to another profession.||374.92|
|11||Shopkeepers (Includes Kiosks, Hair Saloons, Beauty Spa)||357.48|
|12||Butchers, Bakers, Confectioners, Manufacturers / Maintainers products Meat, Milk, Fruit, Tobacco and dealing with similar occupations.||287.73|
|13||Movable Retailers, Mail Distributors, Garbage Collectors, Workers Mining / Quarry / Species stone, Sailors, especially for underwater structures, lifting equipment installers and Rope and Sweepers, Service providers and vendors.||261.57|
|14||Cleaners, Messengers, Guards.||357.48|
|15||Designers, Operators of Computer Equipment, Marine Engineers, Agents and related occupations, Musicians, Magicians.||383.64|
|16||Persons subject to other professions||383.64|
Jan - Mar 2015
Apr - Jun 2015
Jul - Sep 2015
Oct - Dec 2015
- The individuals have the right to pay even more contributions than the minimum insurable earnings, up to their NET INCOME/PROFIT. The contributions are restricted to the maximum threshold of €1,046 weekly net income/profit as in the case of employees.
- They also have the right to reduce their contributions below the minimum insurable earnings in case their actual net income/profit is below the standard income in accordance to their profession. (subject to approval by the social insurance services).
- In case where a person is an employee and has also income from self-employment, he/she is obliged to pay the contributions for both emoluments and at the end of the year he/she will receive a refund for the excess contribution made.
Individuals who are over the age of 65 are no longer required to make contributions for social insurances. However if they do not meet the requirements for an old age pension they must continue to make contributions until those requirements are met or up to the age of 68.