Social Insurance – An overview of Social Insurance in Cyprus
The Cyprus Social Insurance Scheme covers compulsorily every person gainfully occupied in Cyprus either as an employed person or as a self-employed person. The insured persons are classified in three categories; employed persons, self-employed persons and voluntary contributors.
The Scheme is financed by contributions payable by the employers, the insured persons and the State. The rate of contribution for the employed persons as from the 1st of April 2009 is 17,9% and for the self-employed persons as from the 6th of April 2009 is 16,9% on their insurable earnings.
The Scheme provides cash benefits for marriage, maternity, sickness, unemployment, widowhood, invalidity, orphan hood, old age, death and employment injury. The Scheme provides also free medical treatment for persons receiving invalidity pension and for employed persons who sustain injuries as a result or an employment accident or an occupational disease.
Here’s a brief overview of what you will have to pay towards social insurance in Cyprus:
- The participation to the social insurance scheme is mandatory for all gainfully occupied population in Cyprus either as employed or self-employed.
- Employers are liable to contribute 6,3%, employees an additional 6,3% and the Government 4%, summing up to a total contribution of 16,6%. In the case of self-employed persons, 11,6% is contributed by the self-employed and 4% by the Government, summing up to a total contribution of 15,6%.
- Persons working abroad in the service of Cypriot employers and persons who interrupt their compulsory insurance, are allowed to be insured voluntarily.
- The rate of contribution for the voluntary contributors is 13,5% out of which 10% is payable by the voluntary contributor and 3,5% by the Government.
- The social insurance scheme in Cyprus provides for several benefits, such as maternity allowance, sickness benefit, unemployment benefit, old-age pension, invalidity pension, widows’ pension, orphans benefit, benefits for employment accidents and occupational diseases. As of 1st of May 2004, date of accession of the Republic of Cyprus in the European Union, the Social Insurance Services are implementing the E.C. Regulations 1408/71 and 574/72 which coordinates the social insurance schemes of the European Union member states.
- In addition to the payment of the Social Insurance contributions, employers in Cyprus are also obliged to contribute 1,2% to the Redundancy Fund, 0,5% to the Human
- Resources Development Fund and 2% to the Social Cohesion Fund.
For more information please visit our Tax section
