In Cyprus, it is at private companies’ discretion to bolster up employment relationship by introducing extra salaries. The truth is there is no legislation obliging employers in the private sector to pay benefits. However, according to the Cyprus Law on Informing the Employee by the Employer of the Terms Governing the Contract or the Employment Relationship, the employer is obliged to inform the employee in writing through a Collective Agreement or Employment Contract whether they are eligible or not.
In accordance with the instructions of the Ministry of Labor and Social Insurance, the following are relevant clarifications regarding the handling of the 13th and 14th salary contribution payments:
- The 13th and 14th salary, where they are given, are declared in separate statements of earnings and contributions from the salaries of the corresponding period. Specifically, first the contributions for the month of April or May and correspondingly for December are paid with the type of wages being characterized as Normal and then the contributions of the 13th and 14th salary are paid, so that the total of the insurable wages for each period is considered, either they concern January to April – May, or January to December of the same year.
In cases where the employee’s earnings are greater than or equal to the maximum limit of insurable earnings, which indicatively for the year 2023 is €5005 for monthly employees and €1155 for weekly employees, the normal earnings of the period should be declared, meaning the regular salary and nil insurable pay for 13th and 14th pay or other Non-Regular Pay.
- In addition to the statements of earnings and contributions concerning 13th and 14th salary benefits, the actual earnings are declared for the purpose of paying contributions to the Social Cohesion and Health Plan Funds.
- According to the above, the difference of the insurable earnings up to the maximum limit for the period in question, is insured in the Non-Regular Earnings (i.e. in the 13th and 14th salary respectively).
Eurofast Team in Cyprus is at the cutting edge of updates affecting Cyprus manpower. For any further inquiries, contact our office in Nicosia at nicosia@eurofast.eu. Our payroll team is always at your disposal to help you enable robust employment relationship.
Yianna Papademetriou
Payroll Specialist
Eurofast Nicosia
nicosia@eurofast.eu