Hiring your first employee in Cyprus: registrations, real costs, and deadlines

The first hire changes your company’s compliance life more than any other single event. Before it, your Cyprus Ltd files a handful of annual returns and quarterly VAT; after it, you’re an employer — a monthly rhythm of declarations, withholdings and contributions across three government systems, with the first deadline landing before your new colleague’s first day.

Here’s the whole picture for 2026: the registrations, the real cost of a salary once contributions stack up, the employment-law floor you can’t contract below, and the monthly cycle that starts on day one.

Before day one: the registrations

Cyprus runs new-hire compliance through ERGANI, the labour ministry’s online system, and its signature rule is unforgiving in its simplicity: the employer must be registered, and each recruitment declared, no later than one day before employment begins. Not the first payroll, not the first week — before the person starts. Since 2025, the essential terms of employment (role, pay, hours) are also registered in ERGANI, which pairs with the written-particulars duty owed to the employee. Undeclared work is an active enforcement area with inspections and fines, so this is the one deadline in this guide to treat as absolute.

Alongside ERGANI, the company registers as an employer with Social Insurance, and sets up its payroll presence on Tax For All — where the monthly withholding declarations will be filed. (Which system does what is mapped in the portals guide.)

What an employee actually costs

On top of every euro of gross salary, the employer pays (2026 rates):

So a €30,000 salary costs the company about €34,600. The employee, meanwhile, sees their own deductions through payroll: 8.8% social insurance, 2.65% GESY, and income tax under the 2026 bands (nothing below €22,000 of taxable income). All of it — salary and employer contributions alike — is deductible against the company’s 15% corporate tax.

The wage floor: Cyprus’s national minimum wage rose on 1 January 2026 to €979/month on hiring, stepping up to €1,088/month after six months of continuous service (full-time; a few sectors have their own regimes). For the knowledge-work salaries most founders pay, the floor is academic — but it exists, and it indexes upward every couple of years.

The employment-law floor

• Annual leave: minimum 20 days on a five-day week (24 on a six-day week), plus public holidays as provided by contract or practice — Cyprus observes around 15 a year.
• 13th salary: not statutory — but if the contract promises it or the company has consistently paid it, it becomes an enforceable term. Decide deliberately at offer stage; don’t drift into it.
• Probation: up to 104 weeks if agreed in writing at the start; during the first 26 weeks, no statutory notice applies.
• Notice after that: a statutory ladder from 1 week (after 26 weeks of service) up to 8 weeks (after 6 years), in writing.
• Contract: written terms are owed to the employee early in the relationship — and now also registered in ERGANI, so the paperwork isn’t optional in practice even where theory is fuzzy.

The monthly rhythm (this is the real commitment)

Once someone’s on payroll, every single month looks like this:

• Run payroll: compute gross, PAYE income tax, employee SI and GESY, employer contributions.
• File the monthly TD7 withholding declaration on Tax For All and pay the PAYE + GESY withheld — both by the end of the following month. (The monthly TD7 became mandatory from tax year 2025; the old annual-only rhythm is gone, and an annual reconciliation return still exists on top.)
• Pay social insurance contributions — same deadline, end of the following month.
• Issue the payslip and keep the running employment records straight.

Miss a month and surcharges plus interest apply — small individually, tedious in aggregate, and visible to the employee whose social insurance record develops gaps. It’s a genuinely monthly obligation with no dormant months, which is why “we’ll handle payroll ourselves” lasts, on average, until the second missed deadline.

Remote hires abroad: a different animal

A Cyprus company hiring someone who lives in another country generally triggers that country’s payroll, social security and employment law — not the Cyprus machinery in this guide. The clean options are an employer-of-record in the employee’s country or a proper contractor relationship (with the substance to back it). Wiring a Lisbon resident a “Cyprus salary” through Cyprus payroll is the popular third option, and the wrong one.