SOCIAL INSURANCE, NATIONAL HEALTH INSURANCE SYSTEM AND PERSONAL INCOME TAX

Circular A: January 2020

 

 

Social Insurance, National Health Insurance System and Personal Income Tax

 

 

We would like to inform you of the below important changes in relation to Social Security and National Health System (GESY) contributions and the personal income Tax:

 

 

Social Insurance Rates 2020

 

As from 1st January 2020 the maximum amount of insurable earnings has been increased from the previous year to €1.055 per week, €4.572 per month and €54.864 per annum.

 

Contributions to the Social Cohesion Fund are calculated on actual earnings, not subject to the above caps.

SOCIAL INSURANCE CONTRIBUTIONS 2020

Fund

Employer

Employee

 

Social Insurance

8,3%

8,3%

C

Redundancy

1,2%

-

C

Training and Development

0,5%

-

C

Social Cohesion

2,0%

-

N.C

Total

12%

8,3%

 

C=Cap at EUR 4.572/month

N.C= No Cap.

The contribution of self-employed persons will remain unchanged at 15.6% on income which is determined according to the following table:

 

A/A

Professional categories

Lower weekly

limit € *

1.

Doctors, pharmacists, specialists in health matters (qualified), accountants, economists, lawyers and other professionals

 

Up to 10 years

> 10 years

 

 

 

386,98

782,76

2.

Wholesalers, estate agents, directors (businessmen)

782,76

3.

Professors and teachers

 

Up to 10 years

> 10 years

 

 

378,19

756,37

4.

Builders and other persons related to construction industry businesses

474,93

5.

Drivers, excavator drivers and other related professions, technicians, associates in media, machinery users (apart from the construction industry) assemblers of products, clerks, typists, cashiers, secretaries and technicians which do

not fall in any other category

378,19

6.

Shopkeepers, cleaners, messengers, guards and owners of dry cleaners

360,60

7.

Farmers, stock breeders, aviarists, fishermen and other related professions, hawkers, postmen, refuse collectors, workers in mines & quarries, marine workers specializing in underwater constructions, installators of forklift equipment,

street sweepers and people responsible for provision of services and salesmen

263,85

8.

Butchers, bakers, confectioners and similar professions

290,24

9.

Designers, users of computers, ship engineers, agents and musicians, magicians, persons that do not fall in any other professional category

386,98

*Note: The maximum amount of insurable earnings is €1.055 per week for all the above categories.

 

National Health Insurance System (NHIS) Rates 2020

 

The National Health Insurance System Law (NHIS) of 2010 (as amended in 2017) has come into effect as of the 1st of March 2019.

 

Under the NHIS rules, employers and employees are contributing on the employee’s gross earnings and  self-employed individuals are contributing on their gross earnings.  As from 1st of March 2020 the NHIS rates will increase as we described to the below table.

 

The table below summarizing the contribution rates for National Health Insurance System in Cyprus:

Category

As from

1st March 2019

As from

1st March 2020

Employees

1,70%

2,65%

Employers

1,85%

2,90%

Self-employed

2,55%

4,00%

Income earners (e.g. rents, interests, dividends)

1,70%

2,65%

Persons holding office

1,70%

2,65%

Pensioners

1,70%

2,65%

*Note: The NHIS contributions are payable up to maximum annual earnings of €180.000.

 

Personal Income Tax

 

The House of Parliament, on the 6th of December 2019, approved an increase in the percentage of maximum allowable tax deductions in relation to life insurance, medical insurance, social security, pension fund, and provident fund contributions from 1/6 of gross income that was applicable up to 31 December 2018 to 1/5 of gross income.

 

The above is applicable from the 1st January 2019 (tax year 2019) onwards.

 

About AuditLine Ltd

 

AuditLine Limited is an established audit firm of qualified auditors, accountants and business consultants, providing services for the last twenty five years. The company’s main line of services is in the audit, tax and business advisory for multinational companies both local and international.

 

The Firm’s audit, accounting and tax experience range extensively in retail, investment, finance, aircraft leasing, construction, manufacturing, minerals, gas and petrol, banking and services industry companies.

 

For more information about our organization, please visit www.auditline.com.cy

 

This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.

 

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