In short
- 0% on the first €22,000 of taxable income a year, then 20%, 25%, 30% and 35% above €72,000.
- New from 2026: €1,000 to €1,500 for each child and up to €2,000 for rent or mortgage interest.
- Dividends and interest carry no income tax. A non-dom resident pays no defence contribution on them.
- The 2025 return is due by 31 October 2026, the 2026 return by 31 July 2027.
In this guide
Who pays income tax in Cyprus: residents and non-residents
A person who is tax resident in Cyprus pays income tax on income from Cyprus and from abroad. A non-resident pays it on income from Cyprus, such as pay for work done there. Residence is tested again for each calendar year.
You are resident in a year in which your stays in Cyprus add up to 184 days or more. Under the 60-day rule 60 days are enough, with 183 days at most in any other single country, a home in Cyprus and work or an office there. The guide to Cyprus tax residency shows how the days are counted and where each rule fails.
Income tax is one of three charges on a person's income. The Special Defence Contribution (SDC) falls on dividends and interest. GeSY, the General Healthcare System, takes 2.65% of most income. For an owner who moves to Cyprus we file the personal return beside the company's: Cyprus tax services.
Cyprus income tax rates in 2026: the five bands
The rates below apply from tax year 2026. The reform in force since 1 January 2026 raised the tax-free amount from €19,500 to €22,000 and moved each band up with it.
| Rate | Taxable income a year from 2026 | Taxable income a year until 2025 |
|---|---|---|
| 0% | Up to €22,000 | Up to €19,500 |
| 20% | €22,001 to €32,000 | €19,501 to €28,000 |
| 25% | €32,001 to €42,000 | €28,001 to €36,300 |
| 30% | €42,001 to €72,000 | €36,301 to €60,000 |
| 35% | Above €72,000 | Above €60,000 |
On a taxable income of €50,000 the tax is €6,900. The first €22,000 bears nothing, the next €10,000 bears €2,000, the €10,000 after it €2,500 and the last €8,000 bears €2,400.
How much can you earn in Cyprus before you pay tax?
€22,000 of taxable income a year. Taxable income is the gross income less the exemptions and deductions the law allows. An employee with no deduction beyond social insurance and GeSY reaches that amount at a gross salary of €2,070 a month.
To see the net pay on your own salary, use the Cyprus tax calculator.
Deductions and allowances: what the 2026 reform added
Contributions and insurance, up to one fifth of income
Social insurance, GeSY, contributions to pension and provident funds, life insurance premiums and medical fund contributions are deducted. Since 1 January 2026 premiums for disability insurance count too. The group as a whole cannot pass one fifth of the taxable income, measured before these deductions and the family ones come off.
Family and home deductions from 2026
| Deduction | Amount a year | Who gets it |
|---|---|---|
| Dependent children | €1,000 for the first child, €1,250 for the second, €1,500 for the third and each child after | Each parent. A single parent gets double |
| Rent or mortgage interest on the main home in Cyprus | What was paid, €2,000 at most | Each spouse, or a single person |
| Energy upgrade of the main home, or a new electric car | What was spent, €1,000 at most. The rest carries forward for 4 years | Each spouse, or a single person |
| Home insurance against natural disasters | The premiums, €500 at most | Each owner, for any home and with no income test |
The first three depend on the family's gross income of the year. The limit is €100,000 for a couple with no children or with one or two, €150,000 with three or four and €200,000 with five or more. For a single person it is €40,000.
A child counts as dependent under 18, or under 24 as a student. Both spouses file on time and agree in the return that the Tax Department reads the two together.
The family deductions sit outside the one-fifth ceiling, and an employee claims them through the employer on form T.D.59.
What is taxed and what is exempt: salary, pension, rent, interest, dividends
The table shows which of the three charges falls on each kind of income of a Cyprus tax resident in 2026.
| Income | Income tax | Defence contribution | GeSY |
|---|---|---|---|
| Salary and benefits from a job | By the bands | None | 2.65% |
| Profit of a self-employed person | By the bands | None | 4% |
| Pension from Cyprus | By the bands | None | 2.65% |
| Pension for work done abroad | 5% above €5,000 a year, or the bands, by yearly choice | None | 2.65% |
| Rent | By the bands, after 20% of the gross rent comes off | None since 2026 | 2.65% |
| Interest | None | 17% for a domiciled resident, none for a non-dom | 2.65% |
| Dividends | None | 5% for a domiciled resident, none for a non-dom | 2.65% |
Pay includes what the job gives in kind. The yearly value of a home or of meals provided by the employer is taxed with the salary. GeSY stops at €180,000 of a person's income a year, and the amount you pay is deducted for income tax.
Tax on rental income in Cyprus
Rent is added to your other income and taxed by the bands. From the gross rent of a building you deduct 20%, then the yearly allowance for wear of the building and the interest on a loan taken to buy it. The tax on rent is paid during the year as provisional tax: half by 31 July and half by 31 December.
Since 1 July 2026 rent for property in Cyprus is paid by bank transfer, by card or by another recognised electronic means. Cash and cheques are no longer allowed.
Dividends and interest: SDC in place of income tax
Dividends and interest carry no income tax for any individual. A resident who is also domiciled in Cyprus pays SDC on them: 5% on dividends from profits of 2026 onwards and 17% on interest. Interest on government bonds and on listed corporate bonds bears 3%. A resident with non-dom status in Cyprus pays no SDC for up to 17 years.
The guide on how to distribute dividends in Cyprus covers what the company withholds and the 17% that still applies to profits of earlier years.
We do this for you Cyprus corporate tax services from €290 a month with accounting
Who is eligible for the 50% tax exemption in Cyprus?
An employee who takes up work in Cyprus after 15 years away can have half of the pay exempt from income tax. These are the conditions as the law stands in October 2026.
- You were not tax resident in Cyprus for the 15 consecutive years, or longer, right before the employment began.
- The employment in Cyprus began on or after 1 January 2022, with an employer in Cyprus or abroad.
- Your pay from it is above €55,000 a year, tested on the first 12 months in the year you start.
- The exemption lasts 17 tax years from the year the employment began, and a person can use it once in a lifetime.
A later year with pay under €55,000 keeps the exemption where pay was above that amount in the first or second year and the Tax Department accepts the fall as genuine. Becoming tax resident is no condition: the exemption follows the job.
In the Tax Department's calculator a salary of €90,000 bears €16,842.85 of income tax, and €3,137.75 once the exempt half is taken off.
Two smaller exemptions for newcomers and returners
| Exemption | Who qualifies | For how long |
|---|---|---|
| 20% of the pay, €8,550 a year at most | An employee in a first Cyprus job begun by the end of 2027, after 3 years of work abroad for a foreign employer | 7 years, counted from the year after the start |
| 25% of the pay or of business profit, €25,000 a year at most | A former Cyprus resident back after 7 years away, who starts work or a business from 2025 to 2030 and earns above €30,000 a year | 7 years, from the year of the start |
The 25% exemption is the Talent Repatriation Scheme. It also asks for full-time work for an employer abroad: 36 months with a recognised degree, or all 84 months without one.
A person with the 50% exemption gets neither of the other two. The employer applies the exemption in the monthly payroll, which we run as part of payroll services in Cyprus.
Worked example: income tax on a salary of €54,000 with two children
An employee earns €4,500 gross a month, which is €54,000 a year. She is married, has two dependent children and rents the family home for €1,200 a month. Her husband earns €30,000 a year. The family's gross income is €84,000, inside the €100,000 limit.
| Step | Amount a year |
|---|---|
| Gross salary | €54,000 |
| Less social insurance, 8.8% | €4,752 |
| Less GeSY, 2.65% | €1,431 |
| Less the deduction for two children | €2,250 |
| Less rent: €14,400 paid, €2,000 allowed | €2,000 |
| Taxable income | €43,567 |
| Income tax: €2,000, €2,500 and 30% of €1,567 | €4,970.10 |
| Net pay | €42,846.90 |
The two contributions add up to €6,183, under the one-fifth ceiling of €10,800. Without the child and rent deductions her tax would be €6,245.10, so the two save her €1,275 a year.
The Tax Department's calculator, run on 12 October 2026, returns the same €4,970.10. It puts her gain from the reform at €2,260 a year against the rules of 2025. How the employer spreads the tax over the year's payslips is in the guide on how payroll works in Cyprus.
Worked example: a director who takes a salary and dividends
A founder moves to Cyprus and runs her own Cyprus company as its director. In 2026 the company earns €120,000 before her pay. She takes a salary of €2,000 a month and the rest of the profit as a dividend. She is tax resident and holds non-dom status.
| Step | Amount |
|---|---|
| Profit before the director's pay | €120,000 |
| Salary of the year with the employer's 15.4% | €27,696 |
| Taxable profit of the company | €92,304 |
| Corporate tax at 15% | €13,845.60 |
| Dividend | €78,458.40 |
| From the salary, after €2,748 of contributions and no income tax | €21,252 |
| From the dividend, after €2,079.15 for GeSY | €76,379.25 |
| She receives | €97,631.25 |
Her salary stays in the 0% band: €24,000 less €2,748 of social insurance and GeSY leaves €21,252 of taxable income. The dividend bears no income tax at any amount.
An owner domiciled in Cyprus would pay 5% SDC on the same dividend, €3,922.92, and receive €93,708.33. Who counts as domiciled is set out in the guide to the Cyprus non-dom rules.
The Cyprus tax return: who files, where and by when
From tax year 2026 a return is due from every person with gross income of a kind the law taxes. It is also due from every tax resident aged 25 to 70, even with no income. For tax year 2025 it is due where gross income passed €19,500.
| Tax year | Where | Return and tax due | Fee for a late return |
|---|---|---|---|
| 2025 | TAXISnet | 31 October 2026 | €150 |
| 2026 | Tax For All (TFA) | 31 July 2027 | €150 |
| 2026, with audited or reviewed accounts | Tax For All (TFA) | 31 January 2028 | €150 |
An employee's tax is withheld from each salary, so the return confirms it and settles any difference.
Tax paid late bears 5%, a further 5% once the delay passes 2 months, and interest of 3.5% a year. Keep the papers behind a return for 6 years.
We obtain your tax number, claim the deductions and exemptions and file the return each year, together with the company's own filings: tax services in Cyprus.
