The order, and why it is not negotiable
- Register, through the social insurance portal in the ERGANI system. Before the first working day.
- Conclude the employment contract.
- Obtain the T.D.59 from the employee, so the allowances are taken into account in the payroll.
- Run payroll monthly, withhold and pay over contributions and payroll tax.
- File monthly and submit the annual employer’s return T.D.7 once a year.
What an employee really costs
The agreed gross salary is not the cost figure.
The employer additionally pays:
| Contribution | Rate |
|---|---|
| Social insurance | 8.8 % |
| GHS | 2.9 % |
| Social cohesion | 2.0 % |
| Redundancy fund | 1.2 % |
| Human resource development authority | 0.5 % |
| Total | around 15.4 % |
The employee bears 8.8 % social insurance and 2.65 % GHS, plus payroll tax.
On gross pay of €3,000 a month the job therefore costs the employer around €3,462, while the employee receives around €2,657 after contributions and before tax.
According to one source these rates are fixed until the end of 2028.
The deadlines afterwards
| What | When |
|---|---|
| Pay contributions | last day of the following month |
| Payroll tax filing | end of the following month, through Tax For All |
| Employer’s return T.D.7 | once a year |
On late payment of contributions, interest applies plus a statutory surcharge of 3 % a month, capped at 27 %. So the surcharge runs for nine months and then stops; the interest runs on.
On the employer’s return see the guide to the T.D.7, on the employee’s allowances the guide to the T.D.59.
What we could not substantiate
- The contribution ceilings. For social insurance €68,904 and €66,612 a year are quoted, for GHS €180,000 and €200,000. The sources disagree, and with higher salaries that makes a noticeable difference.
- Whether registration must happen before work begins without exception. One source puts it without qualification. We did not inspect an official confirmation.
- The calculation of the late payment surcharge in detail. 3 % a month up to 27 % appears in one source; exactly what it is measured on we did not check.
Before the first hire the question is worth asking, because registration has no correction: Cyprus setup from one place.
Bookkeeping: payroll is not an island
The most common mistake after the first hire is organisational: payroll runs in a spreadsheet or at a provider, the bookkeeping somewhere else, and at month end the two do not match.
In Volk Accountant, payroll sits in the same books as invoices and receipts. The reports show staff costs alongside everything else, Banking holds the payments next to them, and under team everybody gets the access they need.
What else arises in payroll is in the guide to payroll.