Cyprus Income Tax 2026: €22,000 Tax-Free — What Do You Owe After That?
Your first €22,000 in Cyprus is completely tax-free, then progressive rates kick in up to 35%. Learn the exact 2026 brackets, social insurance contributions, key deductions, residency rules, and how to file your return as a resident or expat.
Tax Residency and Who Must Pay Tax
How to Know If You Are a Tax Resident
You are a tax resident in Cyprus if you stay in Cyprus for more than 183 days in a year. You can also be tax resident if you follow the '60 days rule'—if you live at least 60 days in Cyprus, have a home there (owned or rented), work in Cyprus, have business in Cyprus, and do not live in another country for more than 183 days.
Stay 183 days or more: tax resident
Or use the 60 days rule (with work/home/business)
Residents: taxed on worldwide income
Non-residents: pay tax only on Cyprus-sourced income
Cyprus Income Tax Rates 2026
| Annual Income Bracket (€) | Tax Rate | How Tax Is Applied |
|---|---|---|
| €0 – €22,000 | 0% | No tax up to €22,000 (tax-free allowance) |
| €22,001 – €32,000 | 20% | 20% on part above €22,000 |
| €32,001 – €42,000 | 25% | 25% on part above €32,000 |
| €42,001 – €72,000 | 30% | 30% on part above €42,000 |
| €72,001 and above | 35% | 35% on income above €72,000 |
All Cyprus tax residents and non-residents earning Cyprus-source income pay these rates. The tax reform in force from 1 January 2026 raised the tax-free threshold from €19,500 to €22,000 and widened every bracket.
Tax-Free Threshold 2026
No income tax up to €22,000 per year
Main Tax Deductions and Allowances
Social Insurance Contributions
Employee contributions to social insurance are not taxed. You can deduct these payments from your income before tax is calculated.
Life Insurance Premiums
Life insurance and approved medical insurance premiums are deductible, up to 7% of your insured amount and with limits.
Provident and Pension Fund Contributions
Payments to approved provident or pension funds are tax deductible. The total deduction (including life insurance) is limited to 1/5 (20%) of your income.
Trade Union Subscriptions
Annual fees to trade unions or professional bodies can be deducted from your income.
Social Insurance Contributions
Employee and Employer Contribution Rates 2026
For 2026, employees pay 8.8% and employers also pay 8.8% towards social insurance on monthly salary. Contributions are capped at insurable earnings of €68,904 a year (about €5,742 a month) in 2026. Employees also pay 2.65% to the GESY national health system. Self-employed persons pay a different rate, between 15.6% and 19.6% depending on their profession.
Cyprus Social Insurance 2026
| Who Pays | Rate | Assessment Cap (per month) |
|---|---|---|
| Employee | 8.8% | Up to €5,742 (€68,904 a year in 2026) |
| Employer | 8.8% | Up to €5,742 (per employee) |
| Self-employed | 15.6%–19.6% | Depends on profession. Government sets minimum/maximum yearly earnings |
Rates shown are for 2026 under Cyprus law. There are also minor contributions (Redundancy Fund 1.2%, Social Cohesion Fund 2%) but these are employer costs. Employees additionally pay 2.65% GESY (national health), for 11.45% in total.
Special Tax Regimes for Expats and Foreign Workers
Income Tax Relief for New Residents
To attract professionals, Cyprus offers special tax exemptions for new residents who move for work. If you did not live in Cyprus before and start work as a Cyprus tax resident, you may get part of your salary tax-exempt up to a limit and for a limited number of years.
50% exemption for income over €55,000/year (applies for up to 17 years)
Only for people who were non-resident in Cyprus before and meet other criteria
No 20% exemption for lower incomes from 2026 (previous scheme ended 2025)
Other Income: Interest, Dividends, Rental
How Other Income Is Taxed
Dividends and most interest income are not subject to personal income tax in Cyprus for individuals who are Cyprus tax residents but are not 'domiciled' in Cyprus. Instead, these may be subject to the Special Defence Contribution (SDC). Rental income is taxed under personal income tax, but 20% of gross rental income is automatically exempt; social insurance contributions may also be owed on net rental profit.
Dividends and interest: not subject to income tax for 'non-doms', but SDC may apply
Rental income: 20% exempt, rest taxed at standard income tax rates
Social insurance applies to rental income for residents
Tax Filing in Cyprus 2026
How to File Your Cyprus Income Tax Return
Most employees in Cyprus do not need to file a tax return if their income is only from employment and below €22,000. If you earn more or have other income, you must file online through the TAXISnet portal. The deadline is July 31 each year. Penalties apply for late filing.
Tax return deadline: July 31 (following year)
Filing is online only, through TAXISnet
Employer deducts income tax at source each month (PAYE)
Self-employed and landlords must submit a return
You can claim deductions and allowances in your return
2026 Key Changes and Updates
Tax Reform: Tax-Free Band Raised to €22,000
From 1 January 2026 the tax-free band rises from €19,500 to €22,000 and the brackets widen: 20% up to €32,000, 25% up to €42,000, 30% up to €72,000 and 35% above.
Social Insurance Rate Increased
Employee and employer social insurance rates are now 8.8% each in 2026 (up from 8.3% before 2024). The income ceiling for contributions is €68,904 a year in 2026.
Expat 50% Exemption Continues
The 50% tax exemption for new residents earning over €55,000/year stays in force for 2026, up to 17 years for qualifying workers coming to Cyprus.
Mandatory Electronic Filing
From 2026, all individual tax returns must be filed electronically in Cyprus via TAXISnet. No more paper filing is allowed.
Frequently Asked Questions
What are the personal income tax rates in Cyprus for 2026?
For 2026, the Cyprus personal income tax rates are 0% for income up to €22,000, 20% for €22,001–€32,000, 25% for €32,001–€42,000, 30% for €42,001–€72,000, and 35% for any income above €72,000. These bands come from the tax reform in force since 1 January 2026.
How much is the tax-free allowance in Cyprus?
In 2026, the tax-free threshold in Cyprus is €22,000 per year. If you earn less, you pay no personal income tax.
Do expats pay tax in Cyprus?
Yes, expats who are tax residents pay tax on worldwide income. Non-residents only pay tax on income from Cyprus. New residents can use the 50% expat income tax exemption if eligible.
How do I file my income tax return in Cyprus?
You file online through the TAXISnet system. The deadline for 2026 tax returns is July 31, 2027. Most employees do not need to file unless they earn over €22,000 or have other income.
How is social insurance calculated in Cyprus?
For 2026, employees pay 8.8% and employers pay 8.8% of monthly salary, on earnings up to €68,904 a year, plus 2.65% GESY for employees. Self-employed pay between 15.6% and 19.6%, depending on the job.
Are dividends and interest taxed in Cyprus?
Dividends and most interest are not taxed as personal income tax for residents who are not domiciled in Cyprus, but may be subject to Special Defence Contribution (SDC).
What are the main deductions for Cyprus tax?
You can deduct social insurance contributions, life/pension insurance premiums (within limits), provident fund contributions, and trade union subscriptions from taxable income.
What is the 50% expat tax exemption in Cyprus?
If you move to Cyprus for employment and earn over €55,000 per year, you may get a 50% exemption on your income tax for up to 17 years, if you meet conditions.
Is there a capital gains tax in Cyprus?
No, Cyprus does not have a tax on gains from selling shares or other movable assets. Only gains from selling real estate in Cyprus may be taxed, usually at 20%.
Can I file a paper tax return in Cyprus?
No, from 2026, tax returns for individuals must be filed online using TAXISnet.
Calculate Your Cyprus Income Tax
Estimate your Cyprus tax for 2026. Check income tax, social insurance, expat exemptions, and deductions. Get your net salary with the latest rates.