As of the 1st of January 2017, the Special Contribution which
was imposed on gross monthly earnings for salary-based employees
and the self-employed and private sector pensioners in Cyprus has
been abolished. This Special Contribution had been introduced as a
special measure to assist the Government with the economic recovery
program, with a maximum contribution of 3.5% on gross salaries of
EUR 3,501 and above.
For private sector employees and private sector pensioners, the
Special Contribution related to services rendered in Cyprus. In the
case of self-employed individuals the Special Contribution related
to any business carried on in Cyprus.
The payment of the Special Contribution was shared equally by
the employer and the employee and was paid through the PAYE system
and was tax deductible for both the employee and the employer.
