Payroll calculation rules 2026
These are the rules ZEUS Finance Business uses to calculate every payroll in Cyprus and Greece in 2026. The numbers on this page are read from the same rules file the app uses, and the example is worked out by the same engine that produces the payslips: what you read here is what happens in your payroll.
Cyprus: contributions 2026
| Contribution | Employee | Employer | Charged on |
|---|---|---|---|
| Social Insurance | 8.8% | 8.8% | insurable earnings up to €5,742 a month |
| GESY | 2.65% | 2.9% | all earnings, up to €180,000 a year |
| Social Cohesion Fund | — | 2% | all earnings, no ceiling |
| Redundancy Fund | — | 1.2% | insurable earnings (with the Social Insurance ceiling) |
| HRDA (Human Resource Development Authority) | — | 0.5% | insurable earnings (with the Social Insurance ceiling) |
- 13th salary: Social Insurance is charged up to the unused ceiling of the year (€5,742 for each insured month, less what has already been insured), not a new monthly ceiling.
- Redundancy Fund and HRDA: a company that is exempt switches them off in its settings.
- Provident fund (employee and employer), Central Holiday Fund and union fees: at the company's or the employee's rates, where they apply. The provident fund and union fees are charged on the basic salary.
Cyprus: income tax (PAYE)
| Taxable income of the year | Rate |
|---|---|
| €0–22,000 | 0% |
| €22,000–32,000 | 20% |
| €32,000–42,000 | 25% |
| €42,000–72,000 | 30% |
| over €72,000 | 35% |
- Social Insurance, GESY and provident fund contributions and life insurance premiums are deducted from the year's income, together up to 20% of it; the provident fund counts up to 10% of the salary.
- The employee's yearly allowances are deducted too, as you enter them on their record. From 2026: children €1,000, €1,250 and €1,500 (1st, 2nd, 3rd and each further child), rent or mortgage interest on the main home up to €2,000, green upgrades up to €1,000, with an income limit of €40,000 for a single person or €100,000, €150,000 and €200,000 for a family (0–2, 3–4, 5 or more children); home insurance against natural disasters up to €500, with no income limit.
- First-employment exemption in Cyprus (20% or 50% of the income) for those entitled to it: set on the employee.
- Each month's tax: the monthly salary × 12 (× 13 when the contract gives a 13th salary) is the year's income, the year's tax comes from the bands, and each payment keeps its share (the year's tax × the payment's earnings / the year's income).
- The 13th salary and the one-off payments of leavers are taxed at the rate of the normal salary, not as if the salary had grown.
Cyprus: minimum wage and the 13th salary
- From 01/01/2026: €979 a month for full time; €1,088 after 6 months with the same employer.
- For part time, in proportion to the working time. A salary below the minimum shows as a warning on the payslip and in the check before approval.
- 13th salary, when the contract gives one: one salary in proportion to the months of the year, in the December payroll or with the final settlement of someone leaving.
Greece: contributions 2026
| Contribution | Employee | Employer | Charged on |
|---|---|---|---|
| e-EFKA (package 101, private sector) | 13.37% | 21.79% | earnings up to €7,761.94 a month |
- The ceiling applies per payment: the month and the Christmas bonus have the full ceiling, the Easter bonus and the holiday allowance half of it (€3,880.97).
- For special insurance packages (for example heavy and unhealthy occupations) you set other employee and employer rates on the employee's record.
Greece: tax on salaries
| Income | 0 children | 1 | 2 | 3 | 4 | 5 | 6+ |
|---|---|---|---|---|---|---|---|
| €0–10,000 | 9% | 9% | 9% | 9% | 0% | 0% | 0% |
| €10,000–20,000 | 20% | 18% | 16% | 9% | 0% | 0% | 0% |
| €20,000–30,000 | 26% | 24% | 22% | 20% | 18% | 16% | 14% |
| €30,000–40,000 | 34% | 34% | 34% | 34% | 34% | 34% | 34% |
| €40,000–60,000 | 39% | 39% | 39% | 39% | 39% | 39% | 39% |
| over €60,000 | 44% | 44% | 44% | 44% | 44% | 44% | 44% |
- Young people: up to 25, 0% on the first 2 brackets (up to €20,000); from 26 to 30, 9% on the second bracket. The lower rate applies.
- Tax reduction (art. 16 of the Income Tax Code): €777 with no children, €900 with 1, €1,120 with 2, €1,340 with 3, €1,580 with 4, €1,780 with 5, and €220 for each further child. It falls by €20 for every €1,000 of taxable income above €12,000, unless there are 5 or more children.
- Taxable = gross earnings − the employee's e-EFKA contributions. The month × 14 (12 salaries, Christmas and Easter bonuses, holiday allowance) is the year's income; the tax comes from the scale, the reduction is taken off, and each payment keeps its share.
- The employee's children and year of birth are entered on their record; without a year of birth the scale applies as for someone over 30.
Greece: bonuses, holiday allowance and minimum wage
- Christmas bonus: one salary for the whole period 1/5–31/12, otherwise 2/25 of the salary for every 19 days employed, × 1.041666 (the holiday share, 1/24).
- Easter bonus: half a salary for the whole period 1/1–30/4, otherwise 1/15 of half a salary for every 8 days, × 1.041666.
- Holiday allowance: the pay of the leave days, up to half a salary.
- Daily-paid staff: 25 daily wages for the Christmas bonus and 15 for the Easter bonus over the whole period (× 1.041666), up to 13 for the holiday allowance.
- From 01/04/2026: €920 a month, €41.09 a day for daily-paid staff.
- From 01/04/2025: €880 a month, €39.30 a day for daily-paid staff.
For part time, in proportion to the working time; daily-paid staff are checked against the minimum daily wage.
Overtime and unpaid leave
| Cyprus | Greece | |
|---|---|---|
| Hourly rate | salary × 12 / 52 / weekly hours | salary / 25 / 6.67 |
| Weekday overtime | 150% | 140% |
| Weekend | 150% | 175% |
| Public holiday | 200% | 175% |
| Unpaid leave, per day | salary × 12 / 52 / working days a week | salary / 25 (× 6/5 in a five-day week) |
- The company changes the percentages in its settings, and each employee can have a fixed amount per hour for weekdays, weekends and public holidays.
- Cyprus has no general statutory overtime premium: the contract and collective agreements decide, and the defaults are the usual ones. In Greece they are the legal minimums, and a fixed amount below them brings a warning.
- Unpaid leave recorded after the month's payroll has closed is deducted automatically in the next one.
The order of the calculation
- Gross earnings: the salary (or the days × the daily wage) and the month's extra payments, such as overtime and allowances, less unpaid leave.
- Employee contributions: each on its own base and up to its ceiling.
- Tax: brought to a year (Cyprus × 12 or 13, Greece × 14), the scale, allowances and reductions, and the payment's share.
- Other deductions: instalments of the employee's advances and loans, union fees.
- Net = gross − employee contributions − tax − other deductions.
- Employer contributions; cost to the employer = gross + employer contributions.
Every amount is kept in whole cents. Each contribution is rounded to the cent, line by line (half a cent and above rounds up); the tax is worked out for the whole year and then shared.
Example: a gross salary of €2,000
An ordinary month of 2026, full time, no children, over 30, no provident fund and no other allowances; in Cyprus 12 salaries (no 13th), in Greece 14 payments. The amounts come from the app's payroll engine.
| Amount | |
|---|---|
| Gross salary of the month | €2,000.00 |
| Employee Social Insurance (8.8%) | −€176.00 |
| Employee GESY (2.65%) | −€53.00 |
| Income of the year (12 salaries) | €24,000.00 |
| Taxable income of the year (after contributions, up to 20%) | €21,252.00 |
| Tax of the year on the bands | €0.00 |
| Income tax of the month (PAYE) | €0.00 |
| Net pay to the employee | €1,771.00 |
| Employer Social Insurance (8.8%) | €176.00 |
| Employer GESY (2.9%) | €58.00 |
| Employer Social Cohesion Fund (2%) | €40.00 |
| Employer Redundancy Fund (1.2%) | €24.00 |
| Employer HRDA (0.5%) | €10.00 |
| Cost to the employer | €2,308.00 |
| Amount | |
|---|---|
| Gross salary of the month | €2,000.00 |
| Employee e-EFKA (13.37%) | −€267.40 |
| Taxable pay of the month (gross − e-EFKA) | €1,732.60 |
| Taxable income of the year (× 14) | €24,256.40 |
| Tax on the scale | €4,006.66 |
| Tax reduction (art. 16) | −€531.87 |
| Tax of the year | €3,474.79 |
| Tax withheld this month | −€248.20 |
| Net pay to the employee | €1,484.40 |
| Employer e-EFKA (21.79%) | €435.80 |
| Cost to the employer | €2,435.80 |
The example shows the method. In your payroll each employee's details count too: children, age, 13th salary, provident fund, allowances, overtime.
Sources and checks
- Cyprus: KPMG Cyprus: Maximum insurable earnings 2026 (€5,742/month, €68,904/year) · checked 29/09/2026
- Cyprus: Zeno: Cyprus Social Insurance & GESY 2026 rates and caps · checked 29/09/2026
- Cyprus: Social Insurance Services: 13th salary uses the unused ceiling of the year · checked 29/09/2026
- Cyprus: Cyprus tax reform 2026: income tax bands (0% up to €22,000) and new deductions · checked 29/09/2026
- Cyprus: Republic of Cyprus: national minimum wage 2026 (€979 / €1,088) · checked 29/09/2026
- Cyprus: Deputy Ministry to the President: minimum wage €979 / €1,088 from 1 January 2026 · checked 29/09/2026
- Greece: taxheaven: 2026 tax scales and tax-free amounts by children and age · checked 29/09/2026
- Greece: ν. 5246/2025: art. 15 & 16 ΚΦΕ (tax scale, tax reduction) · checked 29/09/2026
- Greece: e-EFKA circular 2026: ceiling €7,761.94; package 101: 13.37% employee / 21.79% employer · checked 29/09/2026
- Greece: Ministry of Labour: minimum wage €920 (daily wage €41.09) from 1 April 2026 · checked 29/09/2026
- Greece: AADE: e-payments requirement (30% of income, max €20,000, 22% on the shortfall) · checked 29/09/2026
The official pages are checked every day for changes. A change reaches the rules only after it has been reviewed, with the date it applies from, so months already calculated stay as they were. When a new year's rates are published they are added to the app, and this page shows the new year with them.
This page explains how the app calculates; it is not tax or legal advice. Your accountant checks and makes the filings.
Last automatic check of the official pages for changes: 10/10/2026.
FAQ
Are these the same numbers the app uses?
Yes. The page and the payroll read the same rules file, and the example is worked out by the same engine that produces the payslips.
What happens if a payroll is for a year whose official rates are not in yet?
The app uses the latest year it has and writes on the payslip that the new year's rates are not in yet, so it is checked before anyone is paid.
Does the app make the filings?
No. It prepares the files (in Cyprus SISnet and the PAYE return in XML, checked against the official schema) and your accountant checks and submits them.
Why is there no tax in the Cyprus example?
Because the year's taxable income (€21,252.00) stays within the first band, taxed at 0% up to €22,000.
Try it with your own numbers
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