Cyprus Labor Law: The Complete Guide

Published on October 2, 2025 and written by Cyril Jarnias

Cyprus, a Mediterranean island at the crossroads of Europe, Asia, and Africa, offers a unique legal framework for labor law. Whether you’re an employer looking to establish your business on the island or an employee considering working there, understanding the specifics of Cypriot labor law is essential. This article will guide you through the key aspects of the system, from employment contracts to workers’ rights, including wages and social obligations.

The Cypriot Employment Contract: The Cornerstone of the Employer-Employee Relationship

In Cyprus, the employment contract is the fundamental document governing the relationship between employer and employee. Cypriot law recognizes two main types of contracts: fixed-term contracts and indefinite-term contracts. Fixed-term contracts are typically used for specific projects or seasonal jobs, while indefinite-term contracts are the standard for permanent positions.

• Identity of the parties
• Workplace location
• Job title, grade, or category
• Employment start date
• Contract duration (for fixed-term contracts)
• Salary amount and payment frequency
• Normal working hours
• Paid leave
• Contract termination conditions

It’s important to note that while a written contract isn’t mandatory under Cypriot law, it’s highly recommended to avoid future misunderstandings. In the absence of a written contract, the employer must provide the employee with a written document containing the essential terms of employment within one month of starting work.

Social Obligations: A Robust Social Protection System

The Cypriot social security system is designed to provide comprehensive protection for workers. All employees and employers are required to contribute to the social security system, which covers a range of benefits including retirement pensions, unemployment benefits, sickness and maternity allowances, as well as disability benefits.

• Employee: 8.3% of gross salary
• Employer: 8.3% of employee’s gross salary
• State: 4.9% of employee’s gross salary

• 2% for the Social Cohesion Fund
• 1.2% for the Human Resources Development Fund
• 0.5% for the Paid Leave Fund (if the company doesn’t have its own paid leave system)

The National Health System (GESY) was introduced in 2019, bringing significant changes to medical coverage. Employers and employees are required to contribute to GESY, with contribution rates of 2.65% for employers and 2.65% for employees, calculated on gross salary.

Minimum Wage and Compensation: A Balance Between Competitiveness and Fairness

• Salespersons
• Office employees
• Caregivers
• Security guards
• Cleaning staff

For these professions, the minimum wage is reviewed annually and varies based on experience. In 2025, the monthly minimum wage for an entry-level employee in these sectors is approximately €940, increasing to about €1,000 after six months of experience.

Regarding average compensation, Cyprus falls in the lower range of the European Union. In 2025, the average monthly salary in Cyprus is approximately €1,675. However, it’s important to note that this figure varies considerably across sectors and skill levels.

• Financial services
• Information technology
• Luxury tourism
• Pharmaceutical industry

Salary Skills: An Evolving Labor Market

The Cypriot labor market is constantly evolving, with growing demand for certain specific skills. The information technology, financial services, and tourism sectors are particularly dynamic and offer interesting opportunities for qualified professionals.

In the technology field, developers, cybersecurity engineers, and artificial intelligence specialists are in high demand. Salaries in this sector can reach €3,000 to €4,000 per month for experienced professionals.

The financial sector, particularly with the growth of online banking and fintechs, also offers attractive prospects. Financial analysts, risk managers, and compliance experts can expect salaries ranging from €2,500 to €5,000 per month, depending on their experience and qualifications.

Tourism, a traditional pillar of the Cypriot economy, continues to offer numerous opportunities. Professionals in the luxury hospitality sector, in particular, can benefit from attractive compensation, with salaries reaching up to €3,000 per month for management positions.

It’s important to note that proficiency in English is a major asset in the Cypriot labor market, particularly in internationally-oriented sectors. Knowledge of Greek, while not essential in all fields, can also provide a significant advantage.

Unions and Workers’ Rights: A Protective Framework

Cypriot labor law places significant importance on workers’ rights and union representation. The Cypriot Constitution guarantees the right to form and join unions, as well as the right to strike. The country’s main unions play an active role in collective bargaining and defending workers’ interests.

• The right to a safe and healthy work environment
• Protection against discrimination and harassment
• The right to paid leave (20 days per year for a 5-day work week)
• The right to adequate breaks and rest periods
• Protection against unfair dismissal

In case of dismissal, employees are entitled to notice that varies based on their seniority, ranging from one week for employees with 26 to 51 weeks of service, up to 8 weeks for those with more than 5 years of service. Additionally, dismissed employees are entitled to severance pay, calculated based on their salary and seniority.

Collective agreements play an important role in regulating labor relations in Cyprus, particularly in certain sectors like construction, hospitality, and transportation. These agreements can establish more favorable conditions than those provided by law in terms of wages, working hours, and other benefits.

Conclusion: An Evolving Legal Framework for a Dynamic Labor Market

Cypriot labor law provides a balanced framework that aims to protect workers’ rights while maintaining the necessary flexibility for employers. With its growing economy and attractiveness to international investors, Cyprus continues to adapt its legal framework to meet the challenges of the modern labor market.

For employers, understanding and respecting the nuances of Cypriot labor law is essential to operating successfully on the island. For employees, whether local or expatriate, knowing their rights and the opportunities offered by the Cypriot labor market can pave the way for a rewarding career in this dynamic Mediterranean crossroads.