Cyprus income tax rates and bands for 2026
Cyprus taxes personal income progressively. Each rate applies only to the slice of chargeable income that falls inside its band, so entering a higher band never taxes your whole income at the higher rate. The bands below took effect on 1 January 2026 under the tax reform passed by the House of Representatives on 22 December 2025 and published in the Government Gazette on 31 December 2025.
| Chargeable income | Rate | Maximum tax in band | Cumulative tax |
|---|---|---|---|
| €0 – €22,000 | 0% | €0 | €0 |
| €22,001 – €32,000 | 20% | €2,000 | €2,000 |
| €32,001 – €42,000 | 25% | €2,500 | €4,500 |
| €42,001 – €72,000 | 30% | €9,000 | €13,500 |
| Over €72,000 | 35% | on the excess | €13,500 + 35% |
What changed in 2026
- The tax-free threshold rose from €19,500 to €22,000.
- The top 35% rate now starts at €72,000 instead of €60,000, so a wide slice of upper-middle income is taxed at 30% rather than 35%.
- The Special Defence Contribution on rental income was abolished. Rent is now taxed only under the income tax bands, plus GESY.
- SDC on dividends for Cyprus-domiciled residents fell from 17% to 5%. Non-domiciled residents remain exempt.
- New income-tested deductions were introduced for household and family circumstances.
Social insurance and GESY rates for 2026
Income tax is only part of the deduction from a Cyprus salary. Employees also pay social insurance and GESY (the General Healthcare System, also written GHS). Both are deducted before chargeable income is worked out, which is why your taxable income is lower than your gross salary.
| Contribution | Employee | Employer | Annual cap |
|---|---|---|---|
| Social insurance | 8.8% | 8.8% | €68,904 |
| GESY (health) | 2.65% | 2.90% | €180,000 |
| Redundancy fund | — | 1.2% | €68,904 |
| Human Resource Development Authority | — | 0.5% | €68,904 |
The redundancy fund and HRDA levies are paid by the employer only. Calculators that deduct them from the employee side overstate the deduction, which is a common error worth checking if you are comparing results across sites.
Worked examples: tax on a Cyprus salary in 2026
Each row below is a Cyprus tax-resident employee with salary income only, no rental income, no dividends and no additional deductions claimed. Social insurance and GESY are deducted first, and income tax is calculated on what remains.
| Gross salary | Social insurance | GESY | Chargeable income | Income tax | Total deducted | Net per year | Net per month | Effective rate |
|---|---|---|---|---|---|---|---|---|
| €20,000 | €1,760 | €530 | €17,710 | €0 | €2,290 | €17,710 | €1,476 | 11.5% |
| €25,000 | €2,200 | €663 | €22,138 | €28 | €2,890 | €22,110 | €1,843 | 11.6% |
| €30,000 | €2,640 | €795 | €26,565 | €913 | €4,348 | €25,652 | €2,138 | 14.5% |
| €35,000 | €3,080 | €928 | €30,993 | €1,799 | €5,806 | €29,194 | €2,433 | 16.6% |
| €40,000 | €3,520 | €1,060 | €35,420 | €2,855 | €7,435 | €32,565 | €2,714 | 18.6% |
| €50,000 | €4,400 | €1,325 | €44,275 | €5,183 | €10,908 | €39,093 | €3,258 | 21.8% |
| €60,000 | €5,280 | €1,590 | €53,130 | €7,839 | €14,709 | €45,291 | €3,774 | 24.5% |
| €72,000 | €6,064 | €1,908 | €64,028 | €11,109 | €19,080 | €52,920 | €4,410 | 26.5% |
| €80,000 | €6,064 | €2,120 | €71,816 | €13,445 | €21,628 | €58,372 | €4,864 | 27.0% |
| €100,000 | €6,064 | €2,650 | €91,286 | €20,250 | €28,964 | €71,036 | €5,920 | 29.0% |
| €150,000 | €6,064 | €3,975 | €139,961 | €37,287 | €47,325 | €102,675 | €8,556 | 31.6% |
Figures are rounded to the nearest euro. A salary of €50,000 leaves roughly €39,093 per year, or about €3,258 per month, at an overall deduction rate of 21.8%. Above €68,904 the social insurance contribution stops rising, which is why the effective rate climbs more slowly at higher salaries.
How the calculation works
The calculator follows the same order the Cyprus Tax Department applies:
- Add gross employment income, taxable rental profit and other taxable income.
- Apply the 20% flat deduction to gross rent from buildings, then deduct allowable mortgage or acquisition interest against the remaining rental profit.
- Deduct employee social insurance at 8.8% on employment income up to €68,904.
- Deduct GESY at 2.65% on total GESY-liable income up to €180,000.
- Deduct pension, life insurance, medical fund and similar contributions, capped at 20% of chargeable income before those deductions.
- Apply the progressive bands to what remains.
- Add 5% SDC on dividends if you are domiciled in Cyprus. Non-domiciled residents pay GESY on dividends but no SDC.
Dividends are outside the income tax bands in Cyprus, so they are excluded from the progressive calculation but still attract GESY, and SDC where domicile applies.
What this calculator does not cover
- Companies, partnerships and self-employed provisional tax.
- Non-resident individuals, who are taxed only on Cyprus-source income.
- The 50% exemption on employment income above €55,000 for people taking up residence in Cyprus, and the 20% first-employment exemption.
- Foreign pension income, taxed at a flat 5% above €5,000 where that is favourable.
- Rent from bare land, which does not get the 20% flat deduction.
Frequently asked questions
How much is income tax in Cyprus in 2026?
Cyprus applies progressive rates: 0% on the first €22,000 of chargeable income, 20% from €22,001 to €32,000, 25% from €32,001 to €42,000, 30% from €42,001 to €72,000, and 35% above €72,000. Each rate applies only to income within its band.
What is the tax-free threshold in Cyprus?
€22,000 of chargeable income per year from 1 January 2026, increased from €19,500 under the previous rules. Because social insurance and GESY are deducted before chargeable income is calculated, a gross salary somewhat above €22,000 can still result in little or no income tax.
How much tax do I pay on a €50,000 salary in Cyprus?
Approximately €5,183 in income tax, plus €4,400 social insurance and €1,325 GESY, giving a total deduction of about €10,908 and a net income of roughly €39,093 per year, or €3,258 per month. This assumes a Cyprus tax resident with salary income only and no additional deductions claimed.
Do I pay 35% on my whole income once I earn over €72,000?
No. Cyprus uses marginal rates. On chargeable income of €80,000 you pay 35% only on the €8,000 above €72,000. The first €22,000 remains tax-free regardless of how much you earn.
How is rental income taxed in Cyprus in 2026?
Rent from buildings receives a 20% flat deduction against gross rent, and interest on borrowing used to acquire the property is deductible against the remainder. The balance is taxed under the normal income tax bands and is subject to GESY at 2.65%. The Special Defence Contribution on rental income was abolished from 1 January 2026.
Is social insurance deducted before income tax?
Yes. Employee social insurance at 8.8% and GESY at 2.65% are deducted before chargeable income is determined, so they reduce the amount subject to income tax.
What is the social insurance cap in Cyprus for 2026?
Maximum insurable earnings are €68,904 per year. Above that level no further employee social insurance is due, so the contribution is capped at €6,063.55. GESY has a separate and much higher cap of €180,000 for a natural person.
How are dividends taxed for non-domiciled residents?
Dividends are not subject to Cyprus personal income tax. A non-domiciled resident pays no Special Defence Contribution on dividends and pays only GESY at 2.65%, subject to the €180,000 cap. A Cyprus-domiciled resident pays SDC at 5% from 1 January 2026, reduced from 17%.
Does this calculator store my salary data?
No. All calculations run in your browser using JavaScript. No income figures are transmitted, logged or stored anywhere.