Guide
Cyprus income tax rates 2026: bands and the tax-free threshold
Updated
Cyprus taxes individuals on a progressive scale. From the 2026 tax year the first €22,000 is free of income tax and the bands above it are wider than they were.
The bands from the 2026 tax year
The Tax Department's own reform material sets out the scale that applies from the 2026 tax year, alongside the scale that applied up to 2025 (Cyprus Tax Department, Tax Reform 2026). The same bands are built into the Department's 2026 employer withholding tool, form T.D.59.
| Taxable income | Rate from 2026 | Rate up to 2025 |
|---|---|---|
| €0 to €19,500 | 0% | 0% |
| €19,501 to €22,000 | 0% | 20% |
| €22,001 to €28,000 | 20% | 20% |
| €28,001 to €32,000 | 20% | 25% |
| €32,001 to €36,300 | 25% | 25% |
| €36,301 to €42,000 | 25% | 30% |
| €42,001 to €60,000 | 30% | 30% |
| €60,001 to €72,000 | 30% | 35% |
| Above €72,000 | 35% | 35% |
Each rate applies only to the slice of income inside its band. On €40,000 of taxable income the tax is not 25% of €40,000: it is nothing on the first €22,000, 20% on the next €10,000, and 25% on the remainder.
Taxable income is not the same as gross salary
Before the bands are applied, an employee's social insurance contributions, GHS contribution and contributions to pension, provident and health funds come out of income. The combined deduction for those contributions and for insurance premiums is capped at one fifth of income, which is the limit the Department applies in Part B of form T.D.59. For a plain salary with no provident fund the deduction runs at about 11.45% of gross, so the cap rarely bites.
Deductions the calculator deliberately leaves out
- Dependent children, rent or mortgage interest, and green transition spending. The 2026 reform introduced personal deductions in each of these categories, subject to family income limits. They are claimed on form T.D.59 or in the annual return, not applied automatically.
- Home insurance against natural disasters, deductible up to €500 a year with no income test.
- Life and disability insurance premiums, limited to 7% of the sum insured and counted inside the one fifth cap.
- Relief for first employment in Cyprus, which can exempt part of employment income for people who were not previously resident. It turns on residence history rather than payroll, so it is out of scope here.
This page states the position on its updated date above. Confirm the current scale with the Tax Department or your accountant before relying on it for payroll.