Social Insurance System Overview
The Cyprus Social Insurance Scheme (SIS) is a comprehensive "pay-as-you-go" system mandatory for all gainfully employed persons on the island, including foreign nationals. Managed by the Department of Social Insurance under the Ministry of Labour and Social Insurance, the scheme provides financial protection against various life events and ensures a retirement pension for those who have contributed to the fund.
Foreigners residing in Cyprus are generally classified into two categories for social security purposes: European Union (EU/EEA) citizens and Third-Country Nationals (TCNs). While the contribution rates are largely uniform, the portability of benefits depends on bilateral agreements and EU regulations. All contributions are calculated based on "insurable earnings," which are subject to both a minimum and a maximum ceiling adjusted annually.
Contribution Rates and Thresholds
For the period 2025–2026, the contribution rates are set according to a predetermined schedule designed to ensure the long-term sustainability of the fund. Contributions are divided between the employee, the employer, and the state.
Employee and Employer Contributions
- Employee: 8.8% of gross earnings.
- Employer: 8.8% of the employee’s gross earnings.
- State Contribution: Approximately 5.1% is contributed by the government to the Social Insurance Fund.
The maximum limit for insurable earnings in 2025 is approximately 1,209 EUR per week ($1,330 USD, Jan 2026) or 5,239 EUR per month ($5,763 USD, Jan 2026). Earnings above this ceiling are not subject to social insurance deductions, though they may still be subject to the General Healthcare System (GHS/GESY) contributions.
Self-Employed Persons
Self-employed individuals are responsible for their own social security contributions. The current rate for self-employed persons is 16.6% of their insurable income. This income is determined based on the person's occupation and years of experience, subject to minimum and maximum limits set by the Department.
Note: In addition to Social Insurance, most residents are also required to pay into the General Healthcare System (GESY). As of 2025, the standard employee rate for GESY remains 2.65%, and the employer rate is 2.90%.
Social Security Benefits
Contributors to the Cyprus SIS are entitled to various benefits, provided they meet specific contribution conditions (the number of "contribution units" earned). Benefits are categorized into short-term and long-term payments.
- Old-Age Pension: The standard retirement age is 65. However, individuals may retire at 63 if they satisfy stricter contribution criteria. The pension consists of a basic part and a supplementary part based on the value of points earned during the working life.
- Sickness Benefit: Paid to employees and self-employed persons who are temporarily unable to work. It usually begins after the 3rd or 9th day of illness, depending on the employment status.
- Maternity and Paternity Allowance: Financial support for parents during their respective leaves. For 2025, the maternity allowance is typically paid for 18 weeks.
- Unemployment Benefit: Paid to insured employees (not self-employed) for a maximum of 156 days per period of unemployment.
- Funeral Grant: A one-off payment provided to survivors to assist with burial costs, currently approximately 842 EUR ($926 USD, Jan 2026).
Registration and Practical Steps
For foreign nationals, obtaining a Social Insurance Number (SIC) is a prerequisite for legal employment. This process should ideally be initiated immediately upon signing an employment contract or starting a business.
How to Register
- Submit Form YKI 1: This is the application for an insurance number. It must be submitted to the District Social Insurance Office.
- Documentation: You must provide a valid passport, a copy of your residence permit (or proof of application), and your employment contract.
- Online Access: Once registered, individuals are encouraged to sign up for the SIS Portal (ARIUS) to track their contribution history and view their pension projections.
International Portability
The portability of your social security contributions depends on your nationality and the countries where you have previously worked:
- EU/EEA Citizens: Under Regulation (EC) 883/2004, periods of insurance completed in any EU member state are aggregated to satisfy the qualifying conditions for a pension in Cyprus.
- Bilateral Agreements: Cyprus has specific social security agreements with countries including the United Kingdom, Canada, Australia, Egypt, and Serbia. These agreements prevent "double insurance" and allow for the aggregation of periods for pension rights.
- Other Third-Country Nationals: If no bilateral agreement exists, contributions made in Cyprus remain in the Cyprus fund. If the individual does not meet the minimum contribution period for a pension (usually 15 years), they may be eligible for a one-time "Lump Sum" payment at age 68 instead of a monthly pension.
