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.
Talk to a specialist Gross, contributions, tax and net, itemised on 2026 rates.
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How this calculator works
- Income tax uses the bands in force from the 2026 tax year: 0% to €22,000, 20% on €22,001–€32,000, 25% on €32,001–€42,000, 30% on €42,001–€72,000 and 35% above €72,000. Until the 2025 tax year the threshold was €19,500 and the top rate started at €60,001 (Cyprus Tax Department, Tax Reform 2026).
- Employee social insurance is 8.8% of insurable earnings, matched by the employer, with the state adding 5.2% to make 22.8% in total (Business in Cyprus, Republic of Cyprus).
- Insurable earnings are capped. For 2026 the Social Insurance Services set maximum insurable earnings at €1,325 a week, €5,742 a month and €68,904 a year for monthly-paid employees. They apply until the end of 2026 (Social Insurance Services, Basic Insurable Earnings 1981-2026).
- The General Healthcare System contribution is 2.65% for employees and 2.90% for employers, on earnings up to €180,000 a year (Social Insurance Services, Contributions).
- Social insurance, GHS and provident fund contributions are deducted before income tax. The combined deduction for contributions to funds and schemes, GHS and insurance premiums is limited to one fifth of income. That is the limit applied in the Tax Department's own 2026 employer withholding tool (form T.D.59).
- The calculator assumes a single employment with no other income, no personal deductions for children, rent, mortgage interest or the green transition, and no exemption for first employment in Cyprus. Each of those reduces tax further and is claimed on form T.D.59 or the annual return.
- Employer cost excludes the Central Holiday Fund contribution, because employers who provide annual leave directly may obtain an exemption from it. If you do not hold an exemption, add it on top.
The bands from the 2026 tax year
The Tax Department's reform material sets out the scale from the 2026 tax year, alongside the scale 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. That 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.