Growing your company to a new country involves planning in several areas, including benefits. When it’s time for employee benefits planning in Cyprus, you’ll need to acknowledge labor laws, learn labor market standards, and prepare your budget.
Cyprus employee benefits plan
With careful planning, your benefits can lead your company to success. A strong benefits package can persuade job seekers to apply for your vacancies, helping your build a strong team faster.
Internally, your employee provisions can boost workplace morale and increase retention. Higher retention rates mean fewer onboarding expenses and a more experienced team. Possible benefits include:
- Holiday bonuses
- Transportation allowances
- Gym memberships
Required benefits for compliance in Cyprus
While your benefits plan can serve as a tool to build your company, it’s also essential to ensure compliance. The country’s labor regulations require employers to provide:
- Paid annual leave
- Maternity leave
- Social insurance contributions
Labor regulations also stipulate a monthly minimum wage of EUR 940 (January 1, 2023) after the initial six months of employment. During the first six months of employment, the minimum payment rate is EUR 885 per month.
Designing Cyprus employee benefits plans
Employee expectations and benefits requirements will look different from one country to another; however, you can follow these fundamental steps to design a competitive plan anywhere.
1. Assess your finances
Benefits will require company spending, so it’s important to determine your earnings and other expenses. Establish what you’re willing to spend on benefits and what scope of coverage you can afford.
2. Research other employers
You’ll need to understand the labor market standards to make a competitive benefits package. Research other employers in the area to learn about the commonly offered benefits and which provisions you should include in your packages.
3. Choose benefits
With the research and financial assessment you’ve conducted, you can make your benefits plans. Allocate funding to the required provisions first, then use your remaining budget for optional perks.
Average cost of benefits
Every employer pays a different amount for benefits, so an average can be a misguiding metric to base your planning on. Factors such as location, industry, and size can influence how much a company is willing to put toward benefits plans.
The best way to guide your planning is to create a budget according to your revenue and expenses. If you make your budget a percentage of your earnings, your funding will automatically scale with your company as it grows.
How to calculate employee benefits
Employee benefits calculations will look different based on the provisions you want to offer. Many calculations are straightforward, such as allowances and bonuses. These benefits require you to set an amount for each employee and distribute it accordingly.
Other benefits, such as company cars, come with more complex calculations. You’ll face variable gas costs that you’ll need to prepare for each month. You may choose to set a monthly mileage limit or provide a gas stipend to make your expenses more predictable.
The labor laws describe the calculation process for required benefits. Social insurance contributions are among the more complex calculations for required provisions. Employees and employers both pay 8.3 percent.
How are employee benefits taxed in Cyprus?
Generally, all remuneration is subject to income tax — including bonuses. A few exceptions exist for the taxation of benefits in kind. These include:
- Capital sums to approved funds
- Lump sums for gratuity or pension
Employee health benefits
Social insurance gives working residents access to affordable care in the public sector. Employers are responsible for making social insurance contributions on employees’ behalves. Private health insurance is not required, but employers may offer it as a fringe benefit.
How Globalization Partners can help scale your teams in Cyprus
Globalization Partners’ global employment platform helps you build and scale an international team quickly and easily, ensuring all benefits offered to candidates are compliant and in line with local regulations. Learn more about our platform and request a proposal today.