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.
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