Cyprus Social Insurance contributions to rise

The House of Representatives approved a government bill increasing the social insurance contributions from April 2009 until 2010 in an effort to ensure the viability of the fund, which is fast shrinking into deficit. 

As of April 2009 and until January 1, 2039 employee and employers contributions will gradually increase by 1.3% every five years. The apportionment of the increase is 0.5% on employees, 0.5% on employers and 0.3% on the state. 

Additionally the government has pledged to contribute EUR 200 mln every year in order for the Fund’s reserves to rise to EUR 1 bln within the next five years.
At present, contributions stand at 16.6% on salaries and this will go up gradually to 17.9% as from April and to 25.7% by 2039.