01Bands
0 to 35%Five tax bands
The first €22,000 is tax free. Then 20%, 25% and 30% in steps up to €72,000, and 35% above. The bands apply to taxable income, after contributions and deductions, not to your gross.
Cyprus payroll · tax year 2026
What you actually take home from a Cyprus salary.
Gross to net for 2026, with the relocation exemptions applied: the 50% for people arriving after fifteen years abroad, the 20% and the new 25%. Social insurance, the General Healthcare System and the new family deductions, line by line.
€22,000Taxed at 0%. The tax-free band rose from €19,500 on 1 January 2026
50%Of all pay exempt for 17 years, once remuneration passes €55,000
11.45%Employee social insurance and healthcare, before any income tax
35%Top rate, on taxable income above €72,000
01 / Rules
Every rate, cap and exemption for 2026.
The December 2025 reform rewrote the bands and added family deductions from 1 January 2026. The relocation exemptions survived it. Where Big Four summaries and Cyprus firms disagree, the row says so.
In law enacted and in force for 2026
Confirm sources differ, adviser to sign off
| Rule | Value | Status |
|---|---|---|
| Tax-free band | Chargeable income up to €22,000 taxed at 0%, up from €19,500 | In law |
| Income tax bands | 20% to €32,000, 25% to €42,000, 30% to €72,000, 35% above | In law |
| 50% exemption | Half of all employment pay exempt where it exceeds €55,000 a year, for 17 years, once in a lifetime, if not Cyprus resident for 15 consecutive years before starting | In law |
| 50% exemption, a year below €55,000 | No exemption for that year. Firms differ on whether the year still counts towards the 17 and on how the first part year is tested | Confirm |
| 20% exemption | 20% of pay, capped at €8,550 a year, for 7 tax years from the year after starting. First Cyprus job after 26 July 2022, 3 years non-resident, employed abroad by a non-Cyprus employer | In law |
| 25% exemption | 25% of pay or profits, capped at €25,000 a year, for 7 years from the start year, for work starting 1 January 2025 to 31 December 2030 | In law |
| 25% exemption, who qualifies | Cyprus resident at some point, then away 7 consecutive years. A degree and 36 months, or 84 months, employed abroad in the last 84. Pay above €30,000, tested in the first 12 months or every year, sources differ | Confirm |
| Social insurance, employee | 8.8% on earnings up to €68,904 a year, €5,742 a month | In law |
| General Healthcare System | 2.65% of pay for employees, on total income up to €180,000 a year | In law |
| One-fifth limit | Social insurance, healthcare, provident fund, life insurance and medical fund contributions together deductible up to one-fifth of chargeable income | In law |
| Provident fund and life insurance | Provident or pension fund up to 10% of remuneration. Life premiums up to 7% of the sum insured. Both inside the one-fifth limit. Not restated in 2026 sources | Confirm |
| Children | Per parent: €1,000 first child, €1,250 second, €1,500 each further child. Doubled for a single parent | In law |
| Rent or mortgage interest, main home | Up to €2,000 a year per spouse, partner or single person. Rent must be paid electronically | In law |
| Energy upgrade or electric car | Up to €1,000 a year per person on the main home or a new electric vehicle. Disaster home insurance up to €500 | In law |
| Family income limits | Single person €40,000. One or two children €100,000, three or four €150,000, five or more €200,000. A couple with no children: €40,000 or €100,000, sources differ | Confirm |
| Company car | Taxed as pay on the Tax Department formula: a private-use share of 30% to 60%, rising with list price, applied to 17% of list price plus fuel and repair elements | Confirm |
02 / Calculator
Gross to net, with your exemption.
Enter the offer as written. The payslip shows a normal month. The breakdown shows the year, the tax in each band, and what the next €1,000 of salary is really worth to you.
Take-home pay
Tool 1 of 3Your offer
€
€
Relocation exemption
Family and home
€
€
Savings and cover
%
€
PAYSLIP · OCT 2026
Net pay this month
€.00
Gross pay
Income tax, PAYE
Social insurance, 8.8%
General Healthcare System, 2.65%
Provident fund
Net pay
Employee · CyprusNo exemption
Net
Income tax
Contributions
The year, salary plus bonus
Gross remuneration
Exempt under the relocation rule
Contributions deducted, after the one-fifth limit
Children, home and other 2026 deductions
Taxable income
Income tax
Social insurance and healthcare
Provident fund
Net for the year
Effective income tax rate
All deductions, as share of gross
Kept from the next €1,000 of salary
Bonus after tax
Assumptions. Tax year 2026, a Cyprus tax resident employee with a full year of pay. Bands 0% to €22,000, 20% to €32,000, 25% to €42,000, 30% to €72,000, 35% above. Social insurance 8.8% on gross up to €68,904 a year, General Healthcare System 2.65% up to €180,000. The 50% exemption applies to all remuneration, salary and bonus, when the total exceeds €55,000. The 20% exemption is 20% capped at €8,550. The 25% exemption is 25% capped at €25,000 and needs pay above €30,000. Contributions, provident fund (up to 10% of remuneration) and life premiums are deducted up to one-fifth of income after the exemption. Children €1,000, €1,250 and €1,500 per parent, doubled for a single parent, and rent or mortgage interest up to €2,000, both only within the family income limit, taken here as €40,000 for a household without children, the cautious reading. The payslip spreads the year evenly over 12 or 13 instalments, excludes the bonus, and treats social insurance on a 13th salary as within the annual cap, which payroll may handle differently. Benefits in kind, a company car and employer contributions are not modelled. The marginal figure adds €1,000 to salary and counts tax, social insurance and healthcare. All to be confirmed by the adviser.
03 / Explained
The eight ideas behind every Cyprus payslip.
Most of the difference between two offers with the same gross figure comes from three of these: the exemption, the one-fifth limit and the instalment count.
02Relocation
50%The 50% exemption
For people arriving after 15 consecutive years outside Cyprus. When pay exceeds €55,000, half of all of it is exempt, not just the part above. It lasts 17 years and can be used once.
03Relocation
€8,550 / €25,000The 20% and 25% exemptions
The 20% suits movers after three years abroad, from the year after they start. The 25% is for Cypriots and former residents returning after seven years away, from 2025 to 2030.
04Contributions
€68,904Social insurance cap
8.8% stops once earnings reach €68,904 a year. On a €120,000 salary the employee pays €6,064, not €10,560. Above the cap, your marginal rate drops.
05Contributions
2.65%General Healthcare System
The national health scheme, also called GESY. Employees pay 2.65% of pay up to €180,000 a year, and the employer adds 2.90%. It gives you a personal doctor and hospital cover.
06Limit
1/5The one-fifth rule
Contributions, pension saving and life premiums reduce taxable income, but only up to one-fifth of it. With the 50% exemption that limit is measured on the half that is taxed, so it often bites.
07Custom
12 or 13The 13th salary
Common in Cyprus but not required by law for private employers. It splits the same annual gross into 13 payments, so a 13-month offer has a smaller monthly figure. Compare annual numbers.
08New in 2026
€1,000+Family deductions
Per parent, €1,000 for the first child, €1,250 for the second and €1,500 for each further child. Up to €2,000 for rent or mortgage interest, and €1,000 for energy upgrades.
The 50% exemption
Why a €100,000 salary can be taxed like €50,000, and the cliff just above €55,000.
The 50% exemption is not a reduced rate on the top slice. Once your remuneration exceeds €55,000, half of all of it leaves the tax calculation. A €100,000 earner is taxed on €50,000, less contributions. Social insurance and healthcare are still paid on the full gross.
€100,000, with the exemption
Taxable income€41,286
Income tax€4,322
Net a year€86,965
€50,000, no exemption
Taxable income€44,275
Income tax€5,183
Net a year€39,093
The €100,000 earner pays less income tax than someone on half the salary. Without the exemption the same €100,000 would carry €20,250 of tax.
At €55,000 you take home €42,192. At €55,001 you take home €48,703. One extra euro of salary is worth €6,511.
That cliff matters in negotiation. If an offer sits at €53,000 or €55,000, moving it to €55,001 costs the employer very little and changes your year. Bonus counts towards the test, but only if it is actually paid, so do not rely on a discretionary bonus to cross the line.
The 2026 reform
What changed for families in 2026.
For the first time, Cyprus income tax recognises children and housing costs directly. Each deduction reduces taxable income, so its value is the deduction times your top rate.
- Higher tax-free band. €22,000 Up from €19,500. Everyone above it saves €500.
- Children, per parent. €1,000 / €1,250 / €1,500 First, second, then each further child. A single parent gets double.
- Rent or mortgage interest. €2,000 Per spouse or partner, on the main home. Rent has to be paid electronically.
- Energy upgrades or an electric car. €1,000 Per person, for capital spending on the main home or a new electric vehicle.
- Family income limit. €100,000 For one or two children, €150,000 for three or four, €200,000 for five or more. Both partners must file a return.
The limit is tested on total family income, so a high-earning couple can lose every one of these deductions. A deduction larger than your tax does not create a refund.
Reading the slip
A payslip, line by line.
A €60,000 salary in 12 instalments, no exemption, no deductions. This is what a Nicosia payroll would show each month.
- Gross pay. €5,000.00 One twelfth of the annual salary.
- Social insurance. €440.00 8.8% of gross, below the €5,742 monthly cap. Your employer pays the same again, plus fund levies.
- General Healthcare System. €132.50 2.65% of gross. The employer adds 2.90%.
- Income tax. €653.25 Pay as you earn, spread from the annual figure of €7,839 on taxable income of €53,130.
- Net pay. €3,774.25 What reaches your account, 75.5% of gross.
If the number differs from your own slip, the usual causes are an exemption not yet on file with payroll, family deductions you have not claimed on form TD59, or a provident fund deduction.
04 / Examples
Three offers, three different answers.
Real-world salary levels, 2026 rules, full-year figures. Each one turns on a different rule.
€42,000, 12 instalments
Has not lived in Cyprus, and was employed by a Greek company for the last four years. Pay is below €55,000, so the 50% exemption is out. The 20% exemption fits, but it only starts in the tax year after she joins.
Net a month, year two onwards€2,986
Year one: €2,824 a month. The 20% exemption is worth €1,940 a year for seven years, about €13,580 in all.
€120,000, relocating with the group
Last lived in Cyprus as a student 20 years ago. First Cyprus employment, pay well above €55,000. Half of everything is exempt, and social insurance stops at the €68,904 cap.
Net a month, with the 50% exemption€8,636
Without it, €6,974. The difference is €19,938 a year, close to €339,000 over 17 years at today's salary.
€38,000 and €30,000, rent €1,600 a month
Family income is €68,000, inside the €100,000 limit. Each parent claims €2,250 for the two children and €2,000 of rent. No relocation exemption applies, they have lived here for years.
Combined net a month€4,889
The 2026 family deductions cut their tax by €1,782 a year. Both must file returns and keep proof the rent was paid by transfer.
05 / Offer and eligibility
Work back from the net you need.
Candidates think in monthly net. Employers budget in annual gross. This tool translates one into the other, and shows what the employer pays on top.
Net to gross, for offer negotiation
Tool 2 of 3Your target
€
Single, no children, no provident fund. Family deductions would lower the gross needed.No exemptionGross a year
Net a year
Employer cost a year
With the 50% exemptionGross a year
Net a year
Employer cost a year
Assumptions. Same engine as the take-home calculator, for a single employee with no children, deductions, provident fund or bonus. The gross is found by binary search to the nearest euro, the lowest salary whose net reaches the target. With the 50% exemption, net pay jumps at €55,000, so many targets are met by any salary just above it. Employer cost adds social insurance 8.8%, Redundancy Fund 1.2% and training levy 0.5% on pay up to €68,904, Social Cohesion Fund 2.0% on all pay, and General Healthcare System 2.90% up to €180,000. Benefits and holiday fund contributions are not included.
Exemption eligibility and expiry
Tool 3 of 3Your history
years
Only used if you have been resident before. A year counts as resident if you spent more than 183 days here, or met the 60-day rule.Your Cyprus job
€
Year by year
Assumptions. 50%: not resident for 15 consecutive years before starting, employment from 2022, remuneration above €55,000, 17 tax years counted from the start year, once in a lifetime. 20%: first Cyprus employment after 26 July 2022, 3 years non-resident, employed abroad by a non-Cyprus employer, 20% capped at €8,550, 7 tax years from the year after starting. 25%: start between 2025 and 2030, resident at some earlier point then away 7 consecutive years, the employment abroad test, pay above €30,000, 25% capped at €25,000, 7 tax years from the start year. Only one exemption can be used. Savings use the take-home engine for a single person at today's salary held flat, and the first year is the part year from the start month, with the €55,000 and €30,000 tests applied to the annual salary. Previous Cyprus employment without a claim is flagged for review. Tax years run 1 January to 31 December. All to be confirmed by the adviser.
06 / Process
Getting the exemption onto your payslip.
An exemption you qualify for but have not filed is only a refund claim, paid a year or more later. Four steps put it into the first payslip instead.
Before you sign
Fix the gross and the exemption
Agree the annual gross, the number of instalments and which exemption payroll will apply. Check the salary clears €55,000 or €30,000 where it needs to.
Evidence of your years abroad: foreign tax returns, residence certificates, past employment contracts.Month one
Register and file form TD59
Get a Cyprus tax identification number, a social insurance number and healthcare registration. Give your employer form TD59, claiming the exemption and any family deductions.
Passport, employment contract, proof of Cyprus address and, for non-EU nationals, the residence permit.During the year
Keep the evidence
Pay rent by bank transfer, keep mortgage interest certificates, provident fund statements, insurance schedules and children's details, and note any change in pay.
Rent paid in cash may not count. A pay cut below €55,000 should be flagged to payroll at once.After year end
File the return and claim the rest
File the personal tax return to claim deductions payroll did not apply, and to confirm the exemption test was met for the year. Any overpaid tax is refunded.
Couples claiming family deductions must both file on time and consent to sharing information.07 / Questions
What people ask before they accept a Cyprus offer.
Fourteen questions, answered with 2026 figures. Each one carries the review date in this page's structured data.
Ask one we missed01How much tax will I pay on a €60,000 salary in Cyprus?
Without an exemption, about €7,839 of income tax in 2026, plus €5,280 of social insurance and €1,590 to the General Healthcare System. That leaves €45,291 a year, €3,774 a month in 12 instalments or €3,484 in 13. If you qualify for the 50% exemption, income tax falls to about €400 and net pay rises to €52,730.
02Does the Cyprus 50% exemption apply to my whole salary or only the part above €55,000?
The whole salary. €55,000 is a qualifying threshold, not a starting point. Once remuneration exceeds it, half of all employment income is exempt from income tax. Social insurance and healthcare contributions are still charged on the full amount.
03What happens to the 50% exemption if my salary drops below €55,000 one year?
You lose the exemption for that year and pay tax normally. KPMG and others read the law this way. Some firms say the entitlement is protected if pay exceeded €55,000 in the first or second year. Whether the low year still uses up one of the 17 years is not settled in the sources we checked, so ask an adviser before agreeing a pay cut or part-time hours.
04Can I claim the 50% exemption if I lived in Cyprus as a child?
Yes, if you were not Cyprus tax resident for at least 15 consecutive tax years just before starting the job, and pay exceeds €55,000. If your time away is shorter, between seven and fifteen years, the 25% exemption for returning residents may apply instead.
05Can I get the 20% exemption in my first year in Cyprus?
No. For employments starting after 26 July 2022 the 20% exemption runs for seven tax years starting from the year after the job begins. Someone joining in March 2026 pays full tax for 2026 and claims 20%, up to €8,550, from 2027 to 2033.
06Who qualifies for the new 25% tax exemption for people returning to Cyprus?
People who were Cyprus resident at some point, then lived abroad for at least seven consecutive years, and start work or a business here between 2025 and 2030. You need a degree and 36 months of employment abroad in the last 84, or 84 months without a degree, and income above €30,000. It exempts 25% of income, capped at €25,000 a year, for seven years. It was enacted in March 2026 with effect from 2025.
07Is the 13th salary compulsory in Cyprus?
No. There is no law requiring private employers to pay a 13th salary. Many do, through the contract or a collective agreement, and once it is in your contract it is owed. It does not add money by itself. Always compare offers on annual gross, not the monthly figure.
08Do I pay social insurance on my whole salary in Cyprus?
Only up to €68,904 a year, €5,742 a month. Above that the 8.8% stops. The General Healthcare System charge of 2.65% runs much higher, up to €180,000 of income. On a €120,000 salary that is €6,064 of social insurance and €3,180 of healthcare.
09Can I deduct rent from my taxes in Cyprus in 2026?
Yes, from 2026, up to €2,000 a year per person for rent or mortgage interest on your main home, if family income is within the limit and the rent is paid electronically. For a single person the income limit is €40,000, so many relocating professionals will not qualify.
10How much is the Cyprus child tax deduction in 2026?
Each parent deducts €1,000 for the first child, €1,250 for the second and €1,500 for the third and each further child. A single parent deducts double. Family income must be within €100,000 for one or two children, €150,000 for three or four, and €200,000 for five or more.
11Does the relocation exemption reduce my social insurance in Cyprus?
No. The 50%, 20% and 25% exemptions only reduce income tax. Social insurance and healthcare contributions are charged on full gross pay. Because of the one-fifth limit, part of those contributions may also stop being deductible once half your pay is exempt.
12How is a company car taxed in Cyprus?
As a benefit in kind, added to taxable pay. The Tax Department formula takes a private-use share between 30% and 60%, higher for more expensive cars, and applies it to a use value of 17% of the list price plus elements for fuel and repairs. A car over six years old uses a lower rate. A genuine commercial van is a flat €500 a year. Ask payroll for the figure before you choose a car.
13Are provident fund contributions tax deductible in Cyprus?
Yes, up to 10% of remuneration, but inside the overall one-fifth limit with social insurance, healthcare and life insurance. A provident fund is still worth having for the employer's matching share, which is not taxed as pay when it goes in.
14How do I get my employer to apply the exemption through payroll in Cyprus?
Complete form TD59 at the start of the job or tax year, claiming the exemption and any deductions, and give your employer the evidence of your years abroad. Payroll then applies it to monthly tax. Without it you pay full tax and claim the difference back on your annual return.
Free checklist
Relocation offer checklist: 12 things to agree before you sign.
- Annual gross, and 12 or 13 instalments
- Which exemption payroll applies from month one
- What happens if pay dips below €55,000 or €30,000
- Housing, schooling and moving costs, and how each is taxed
- Company car, phone and health cover as benefits in kind
- Provident fund rate, bonus basis and payment dates
Request the checklist
Two pages, sent by the adviser. Ask for it in the form below.
Who stands behind this page
Aqualis Ltd, chartered accountants in Nicosia.
Aqualis runs Cyprus payroll for employers and advises relocating employees on their exemption, their TD59 and their first tax return. The adviser named here signs off every figure on this page.
ICPAC memberICAEW memberEnglish and Greek
Payroll adviser[name, title]
Office[address], Nicosia, Cyprus
Serviceaqualis.com.cy/employment-solutions
ResponseWithin one working day