Can I Claim Employer Payroll Contributions as a Business Expense in Cyprus?
Yes. Employer social insurance, GESY and the employer funds are payroll costs of the business.
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What Tax Department (Τμήμα Φορολογίας), Ministry of Finance says
Employers pay social insurance at 8.8%, GESY at 2.90%, the Redundancy Fund at 1.2%, the Industrial Training Fund at 0.5% and the Social Cohesion Fund at 2.0%. Social insurance and the funds other than cohesion apply up to the 2026 cap of €5,742 a month. The cohesion fund applies to total earnings without the cap.
When you can claim
- Employer social insurance at 8.8%
- Employer GESY at 2.90%
- Redundancy Fund and Industrial Training Fund contributions
- Social Cohesion Fund at 2.0%
When you cannot claim
- The employee share of social insurance and GESY, which comes out of the employee's pay
- Late payment charges
- Contributions on payments that are not salary
- Contributions for people who are not employees
Good to know
Pro tip: The cohesion fund is uncapped, so employer cost on high salaries does not stop at the social insurance ceiling.
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