Cyprus Employment Law for Czech Employers

Legal framework and key differences

In the Czech Republic, by contrast, the Labour Code requires every employment contract to be concluded in writing only and before the employee starts work. If the written form is not complied with, the employer faces a fine from the Labour Inspectorate of up to CZK 10 million. This is a fundamental difference and often becomes a pitfall for Czech companies operating in Cyprus if they apply their domestic administrative approach there.

Both legal systems, however, agree that employees are entitled to fair working conditions, protection against discrimination, and a statutory minimum income. The differences lie in practical details, for example in the approach to probationary periods, the length of the working week, or the rules on termination of employment.

Key legal sources

In Cyprus, employment law is governed primarily by the Termination of Employment Law, the Transparent and Predictable Working Conditions Law (implementing EU Directive 2019/1152), and other specific statutes. In the Czech Republic, the main source is Labour Code No. 262/2006 Coll., which is very detailed and comprehensive.

Mandatory content requirements of an employment contract

We now come to one of the most common sources of issues: what an employment contract or a notice of terms must contain to ensure everything is compliant.

In Cyprus, under the Transparent and Predictable Working Conditions Law, the employer is required to provide the employee with basic information no later than 7 days from the start date. This mandatory information includes the identity of the parties, the place of work, a description of the position, the start of employment, the probationary period, salary amount, and working hours. Further information on holiday entitlement and notice periods must be provided within one month.

In the Czech Republic, the Labour Code strictly requires the employment contract to include three essential elements directly in the text of the contract signed before the employee starts work: the type of work, the place of work, and the start date. Additional information must be provided by the employer in writing within 7 days of the employment relationship arising, if it is not included directly in the contract.

If a Czech company takes its standard Czech template and tries to use it in Cyprus without adjustments, it may omit specifics required by Cypriot law. For example, a specific reference to Cypriot social funds or a precise breakdown of salary components in line with local practice is often overlooked.

Practical essentials for a Cypriot employment contract

The employment contract or written notice must include: identification details of both parties, the place of work, a description of the job position, the start of employment, the probationary period and its conditions. It must also include salary (including the amount and payment frequency), working hours, holiday entitlement, the notice period, and information on social security.

Transparency and the ERGANI system

Employers in Cyprus are required to register employment details in the ERGANI electronic system before the employee starts work. This Ministry of Labour system is used to combat illegal work, and it records information on salary, contract type, and working hours.

Type and duration of the employment contract

One of the most important differences between Cyprus and the Czech Republic is the regulation of successive fixed-term employment contracts and the maximum duration of a fixed-term contract.

In Cyprus, the rule is that if the total duration of fixed-term contracts exceeds 30 months, the contract is automatically deemed to be an indefinite-term contract. An exception applies where the employer demonstrates an objective reason for the fixed-term arrangement to continue. Details are available on the EURES Cyprus portal.

In the Czech Republic, the situation is different: a fixed-term employment contract under Czech law may be concluded for a maximum of 3 years and may be renewed twice. The maximum possible total duration of a fixed-term employment relationship is therefore 9 years. In the Czech Republic, you therefore have significantly more time to chain fixed-term contracts than in Cyprus.

Practical implications for Czech companies

If your Czech company is used to Czech practice, where an employee can be kept on a fixed-term basis for several years, be careful in Cyprus. The 30-month limit is relatively strict, and the automatic conversion to an indefinite-term contract gives the employee stronger protection against dismissal.

Working hours, overtime and annual leave

Working hours are another area where compliance is essential, particularly due to EU limits and local practice.

In Cyprus, the standard working week is usually 38 to 40 hours, and the maximum average working time including overtime must not exceed 48 hours per week. The employee is also entitled to at least 11 hours of uninterrupted rest between shifts and 24 hours of weekly rest.

In the Czech Republic, the statutory weekly working time is 40 hours, and the maximum overtime limit is 150 hours per year ordered by the employer under Czech labour law. With agreement, the total may be up to 416 hours per year, and the employee is entitled to uninterrupted weekly rest of at least 35 hours.

Annual leave in Cyprus vs. the Czech Republic

In Cyprus, an employee working a five-day working week has a statutory entitlement to at least 20 working days of paid annual leave per year. With a six-day working week, the entitlement increases to 24 days.

In the Czech Republic, the basic annual leave entitlement under Czech law is 4 weeks, i.e., 20 days for a five-day working week. In Cyprus, leave may be carried over for up to two years if the parties agree or if there are objective reasons.

Overtime and compensation

In Cyprus, overtime in many sectors is governed by collective agreements; a common rate is 1:1.5 on weekdays or 1:2 on public holidays and Sundays. In the Czech Republic, overtime entitles the employee to the wage earned plus a supplement of at least 25% of average earnings under Czech legislation, or compensatory time off.

Minimum wage and social security contributions

This is an area where amounts change, and for 2026 it is necessary to rely on the currently applicable regulations and their indexation.

Minimum wage in Cyprus

Since 2024, Cyprus has had a new national minimum wage of EUR 900 gross upon commencement of employment. After 6 months of continuous employment with the same employer, it increases to EUR 1,000, and these amounts may be further adjusted.

In the Czech Republic, the minimum wage for 2025 is set at CZK 20,800, which is approximately EUR 830. In nominal terms, the Cypriot minimum wage is therefore higher than the Czech one.

Social security contributions

In Cyprus, the employee pays approximately 8.8% in social security contributions and 2.65% into the healthcare system (GESY). The employer pays approximately 8.8% in social security contributions and additional contributions to specific funds, totalling roughly 15–16% on top of gross salary.

In the Czech Republic, the employee pays 6.5% for social security and 4.5% for health insurance under Czech law. The employer pays significantly more, totalling 33.8% of the gross salary.

Actual labour costs

It follows from the above that non-wage labour costs in the Czech Republic are more than double those in Cyprus. For Czech companies expanding to Cyprus, this is positive news in terms of payroll costs, although nominal wages in Cyprus may be higher.

Probationary period

The probationary period is used to verify mutual satisfaction, and its length differs in both countries.

In Cyprus, following the 2023 amendment, the maximum probationary period is 6 months. During this period, the employer may terminate the employment more flexibly; however, the notice must be in writing.

In the Czech Republic, the standard probationary period is 3 months, and up to 6 months for managerial employees. The employment relationship may be terminated during this period for any reason or without stating a reason.

If you are posting a worker to Cyprus and entering into a contract under Cypriot law, you can use a probationary period of up to 6 months. However, note that the probationary period cannot be agreed retroactively and must be clearly stated in the terms upon commencement.

Termination of employment: Procedures and employee protection

This is an area where Czech companies most often run into difficulties, because the Cypriot system of protection against dismissal is specific.

General rules and protection after 26 weeks

In Cyprus, an employee becomes entitled to protection against unfair dismissal and to severance pay only after 26 weeks of continuous employment.

Until then, termination is easier, but it still must not be discriminatory—for example, on the grounds of pregnancy or race. After 26 weeks, an employer may give notice only for statutory reasons, such as redundancy or incapacity to perform the work.

The notice period in Cyprus depends on the length of employment and ranges from 1 week up to 8 weeks. In the Czech Republic, the notice period for both the employer and the employee is typically 2 months and starts running on the first day of the following month.

Table of the most common mistakes when terminating employment

Employment law for employees posted from the Czech Republic to Cyprus

If your Czech company sends an employee to work in Cyprus temporarily, specific rules on the posting of workers apply.

Basic rule

Even if the employment contract is governed by Czech law, the “hard core” of Cypriot employment law must be applied to the posted worker if it is more favourable for the employee. This includes the minimum wage, working hours, holiday entitlement, and occupational health and safety rules.

Social security (A1 form)

For a temporary posting, typically up to 24 months, the employee may remain insured under the Czech social security system. For this, it is necessary to arrange an A1 form with the Czech Social Security Administration (Česká správa sociálního zabezpečení); otherwise, you must pay social security contributions in Cyprus from day one.

Conclusion

Employing staff in Cyprus offers Czech companies opportunities in the form of lower contributions, but also administrative challenges such as registration in ERGANI and specific employee protections. The key to success is not to rely blindly on Czech contract templates and to respect local specifics.

ARROWS, a Prague-based law firm, has cross-border experience through the ARROWS International network and can help you set up employment in Cyprus so that it is safe and efficient.

If you are not sure how to proceed correctly, ARROWS advokátní kancelář is here to help. Contact us at consultation@arws.cz.

The law does not strictly require one formal contract signed in advance, but it does require that written information about the terms of employment be provided within 7 days to 1 month from the start date.

2. What is the minimum wage in Cyprus in 2026?

Based on the current regulation, the minimum wage is EUR 900 upon commencement and EUR 1,000 after 6 months; for 2026, any indexation should be verified.

3. Can I dismiss an employee in Cyprus without stating a reason?

Only during the probationary period. After it ends—especially after 26 weeks of employment—you must have a statutory reason and comply with the notice period; otherwise, you risk a claim.

Read also:

• How non-EU Businesses Should Approach Hiring in the Czech Republic: What to Know When Hiring
• How non-EU employers can adapt to Czech employment standards: What to check before signing contracts
• Avoiding HR Litigation and Common Legal Misconceptions in Czech Employment Law
• Czech Labour Inspections 2026: Compliant Pay, Bonuses and Transparency
• New EU Pay Transparency Directive: Key Obligations for Czech Employers by 2026