Introduction As of January 1, 2025, Cyprus will implement changes to the maximum insurable earnings for Social Insurance contributions. Announced by the Cyprus Employers & Industrialists Federation (OEB) in partnership with the Social Insurance Services, this increase ensures the ongoing sustainability of the Social Insurance Fund while enhancing benefits for contributors. The adjustments will primarily affect high-income earners and their employers.
Details of the Adjustment The maximum insurable earnings determine the upper limit of income on which Social Insurance contributions are calculated. Starting January 2025, these thresholds will be:
- Weekly: €1,281
- Monthly: €5,551
- Annually: €66,612
In contrast, the 2024 limits were set at €1,209 weekly and €5,239 monthly, totaling €62,868 annually. This represents an approximate 6% increase in the insurable earnings cap.
Impact on Employers and Employees Both employers and employees contribute 8.8% each to the Social Insurance Fund based on insurable earnings. The revised thresholds mean:
- Higher-income earners will now contribute based on the increased maximum earnings, resulting in slightly higher deductions from salaries.
- Employers will see an increase in their contribution costs for employees earning above the previous cap.
These changes emphasize the importance of updating payroll budgets and ensuring compliance with the new regulations.
Eurofast’s Insights Eurofast remains dedicated to keeping businesses informed about important regulatory updates, including changes to Social Insurance contributions. Our team is equipped to provide guidance on how these adjustments may affect your payroll operations and financial planning.
We offer customized solutions to help you navigate these updates efficiently while ensuring compliance and minimizing financial impact. For further queries, please, contact us at nicosia@eurofast.eu