Most guides about relocating to Cyprus as a remote founder cover the personal tax setup: Non-Dom status, company structure, dividend distribution. Far fewer explain what happens when you start hiring locally. Employment law in Cyprus is not complex, but there are statutory minimums every employer must meet regardless of what a contract says.
This guide covers the essentials: annual leave, notice periods, maternity provisions, working hours, and probation. If you are setting up a Cyprus Ltd and plan to bring on local staff at any point, these are the numbers you need to know.
The Legal Framework
Cyprus employment law is governed primarily by the Termination of Employment Law (24/1967) and the Annual Holidays with Pay Law, with supplementary provisions under Social Insurance legislation. The system is fully EU-compliant and, in comparison to Germany, France, or Spain, notably more flexible for employers.
One distinction worth making early: these rules apply to employees on a contract of service. If you are a company director drawing dividends rather than salary under Cyprus Non-Dom status, you operate under a different set of rules entirely. The two regimes do not overlap.
Annual Leave
Employees on a 5-day week are entitled to 20 working days of paid annual leave per year. Those on a 6-day week receive 24 days. Leave begins accruing after 48 weeks of continuous employment with the same employer. By mutual written agreement, it can accumulate for up to two years.
Cyprus also has 12 official paid public holidays per year. Employees who work on a public holiday are entitled to a compensatory day off or premium pay as agreed in the contract.
For founders coming from Southern or Northern Europe, 20 days sits at the lower end of what they may be used to - which is worth noting when setting expectations during recruitment.
Notice Periods for Termination
Statutory minimum notice periods for employer-initiated termination are based on continuous service:
| Length of Service | Notice Required |
|---|---|
| Under 26 weeks | None |
| 26-51 weeks | 1 week |
| 52-103 weeks | 2 weeks |
| 104-155 weeks | 4 weeks |
| 156-207 weeks | 5 weeks |
| 208-259 weeks | 6 weeks |
| 260-311 weeks | 7 weeks |
| 312 weeks or more | 8 weeks |
Payment in lieu of notice is permitted. Employees dismissed after 26 or more weeks of continuous service are also entitled to a redundancy payment calculated on length of service and final salary.
The 8-week maximum cap compares well against most EU jurisdictions. Spanish employment law, for example, can require significantly longer notice and larger severance packages for long-serving employees - one of several structural differences founders who relocated from Spain tend to notice.
Maternity Leave
Maternity leave is paid through the Social Insurance Fund, not directly by the employer. Entitlements are:
- First or second child: 22 consecutive weeks
- Third child or more: 26 consecutive weeks
The Social Insurance benefit is calculated at 72% of the insured salary, rising to 80% with one dependent child, 90% with two, and 100% with three or more. A minimum of 26 Social Insurance contribution weeks is required to qualify.
For employers, the key implication is that maternity leave cost does not fall on the business. This is materially different from jurisdictions where employers bear all or part of the maternity benefit.
Working Hours and Overtime
The maximum working week is 48 hours including overtime, in line with the EU Working Time Directive. Most employees work a 38-40 hour week. Overtime is compensated at 1.5x the standard hourly rate unless a different arrangement is agreed in writing.
Probation Periods
Contracts in Cyprus may include a probation period of up to 6 months. During this window, either party can terminate without notice or redundancy payment. The probation clause must be stated in writing - verbal agreements are not enforceable.
Six months is a standard probation length across Cyprus-based companies, particularly in the tech and fintech sectors that have grown significantly around Limassol and Larnaca.
Putting It in Context
Employment law sits downstream of several other setup steps. Before you hire, you need the foundations in place: EU registration (covered in the Yellow Slip guide), tax residency status (which the 60-day tax residency rule explains for those not staying 183+ days), and a properly incorporated entity (see Cyprus company formation for costs, timeline, and structure).
Once those are in place, the employment framework in Cyprus is straightforward to operate within. Notice periods are capped and transparent, maternity costs sit with the state, and probation terms give employers a reasonable trial window without legal exposure.
For the full statutory breakdown including source legislation, visit Cyprus Employment Law 2026: Leave, Notice and Maternity.
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