In Cyprus, employers are required by law to provide a comprehensive set of benefits to their employees. These benefits ensure social security, protection during leave periods, and fair compensation practices.

Social Insurance Contributions

Under the Social Insurance Law (1980), a mandatory social security system is established, funded by contributions from both employers and employees. The benefits covered by social security contributions include unemployment benefits, old age pension, employment injury benefits, maternity benefits, sickness benefits, invalidity benefits, and survivors' benefits.

Paid Annual Leave

The Annual Leave Law (1967) guarantees employees a minimum amount of paid annual leave each year. Full-time employees are entitled to a minimum of 20 working days (four weeks) of paid annual leave per year. This entitlement may increase based on factors like collective bargaining agreements or company policy. Employees typically accrue paid leave throughout their employment, with the specific accrual rate depending on the company's policy.

Public Holidays

Employees are entitled to paid leave on all designated national and public holidays in Cyprus under the Public Holidays Law. There are currently 14 official public holidays in Cyprus.

Sick Leave

Sick leave is covered under the Social Insurance scheme. Employees become eligible for paid sick leave after the first three days of illness, provided they submit a medical certificate from a registered doctor. Social Security provides paid sick leave for up to 312 days at a percentage of the employee's salary (up to 60%), which may increase with dependents.

Maternity Leave

The Protection of Maternity Law (1997) ensures working mothers receive paid leave and job security during pregnancy and childbirth. The minimum maternity leave entitlement is 18 weeks, with additional weeks granted for subsequent children (up to 26 weeks for the third child and beyond). During maternity leave, women are entitled to benefits through the Social Insurance scheme.

Paternity Leave

Under the Paternity Leave Law (2002), fathers are entitled to a period of paid paternity leave upon the birth of a child. Fathers are entitled to two weeks of paid paternity leave at their full salary.

Severance Pay

In cases of termination, employees are entitled to severance pay under Cypriot law. The amount of severance pay depends on the length of service and can range from two weeks' wages for each year of employment (up to four years) to four weeks' wages for each year worked over 20 years.

In Cyprus, beyond the mandatory benefits, employers offer a variety of optional benefits to attract and retain talent. Here's a breakdown of some popular perks:

Financial Benefits

• Holiday Bonuses: Many companies offer a bonus at the end of the year or during major holidays like Christmas or Easter.

• Transportation Allowances: To help offset commuting costs, employers may provide a transportation allowance or even company cars.

Health and Wellness Benefits

• Gym Memberships: Companies may subsidize or fully cover gym memberships to promote employee health and well-being.

• Free Snacks and Meals: Offering healthy snacks and sometimes even free lunch at a company canteen can be a perk for employees, especially those working long hours.

Work-Life Balance Benefits

• Extended Vacation: Some companies reward long-term employees with extended vacation time after a certain number of years of service.

• Flexible Work Arrangements: Modern companies in Cyprus may offer flexible work arrangements, such as remote work options or compressed workweeks, to promote a better work-life balance for employees.

• On-Site Amenities: Offering amenities like massage services or relaxation areas in the office can help reduce stress and improve employee well-being.

In Cyprus, health insurance for employees is a critical consideration. There are two main aspects to this: the mandatory General Healthcare System (GESY) and optional private health insurance.

Mandatory General Healthcare System (GESY)

All legal residents of Cyprus, including employees, are required to contribute to and be registered with the General Healthcare System (GESY). This public health insurance scheme provides basic medical coverage, including inpatient care at public hospitals, outpatient care from public doctors, emergency department visits, and some medications. Employers are required to register their employees with GESY and deduct the employee contribution from their salary.

Optional Private Health Insurance

While GESY provides basic coverage, some employees may choose to obtain private health insurance on top of GESY. The reasons for this can include reduced waiting times for certain procedures or specialist consultations, wider coverage for additional services not included in GESY, such as dental care, vision care, or private hospital rooms, and international coverage for employees with international needs.

Considerations for Employers

Employers should be aware of certain considerations when it comes to health insurance. For foreign workers from non-EU countries who are living and working in Cyprus, it is mandatory for employers to provide health insurance. This insurance needs to meet the requirements set by the Cyprus immigration authorities. Additionally, companies can obtain group health insurance plans for their employees, which can be a cost-effective way to provide private health coverage to a group of employees.

Employees in Cyprus have the opportunity to plan for their retirement through a combination of a social security scheme and employer-sponsored plans.

Statutory Social Security Scheme

This scheme provides a basic level of pension upon retirement.

• Eligibility: All employed and self-employed individuals in Cyprus contribute to the scheme.
• Retirement Age: The standard retirement age is 65, with the possibility of early retirement at 63 under specific circumstances.
• Benefits: The pension consists of a basic pension and a supplementary pension, with the amount determined by contributions throughout your working life and the number of dependents.

Employer-Sponsored Retirement Plans

Employers in Cyprus often offer additional retirement benefits through private plans. The two main options are:

• Provident Funds: These are group pension plans established by companies where both employer and employee contribute a fixed percentage of the salary into a common investment pool.
• Occupational Pension Plans: These plans can be set up through life insurers or multi-employer occupational retirement funds. They offer more flexibility and investment options compared to provident funds.

Recent Developments

The landscape of employer-sponsored retirement plans is evolving in Cyprus. Traditionally, companies established their own provident or pension funds. However, recent regulations have made this approach more administratively burdensome. As a result, there's a growing trend towards using pre-designed plans offered by life insurers or multi-employer IORPs (Institutions for Occupational Retirement Provision).

Choosing the Right Plan

The best option for you will depend on your specific circumstances and your employer's offerings. Consider factors like contribution rates, investment options, and retirement goals when making your decision. It's advisable to consult with a financial advisor to understand the details and choose the plan that best suits your needs.