Cyprus Tax Calculator 2025

Under the revised Cyprus Income Tax Law, anyone who begins their first job in Cyprus on or after 1 January 2022 can benefit from a 50% exemption on their employment income, provided they have not been a Cyprus tax resident for at least 15 consecutive years before starting work and their annual salary exceeds €55,000 (this threshold may be met in either the first or second year).

This half‑income exemption is available from the year employment commences and may continue for up to 17 years, but it will be suspended for any tax year in which the individual’s remuneration falls below €55,000.

Under the updated Cyprus Income Tax Law, employees earning less than €55,000 per year may receive a 20% exemption on their employment income, provided they were not Cyprus tax residents for at least three consecutive years before starting work.

The annual exemption is capped at €8,550 and can be claimed for seven years, beginning in the year following the commencement of employment.

Gross salary is the total amount you earn before any deductions like taxes, social insurance, and health contributions. In employment contracts, gross salary is typically stated as an annual amount.

Gross salary is your income before deductions, while net salary is what you receive after all deductions like tax and insurance contributions. Net salary is also known as your take-home salary.

Progressive tax means the tax rate increases as the taxable amount increases, so that higher‐income earners pay a larger percentage of their income in tax.

In Cyprus, personal income tax is applied on a progressive scale for the 2025 tax year:

• €0 – €19 500: 0% (tax-free)

• €19 501 – €28 000: 20%

• €28 001 – €36 300: 25%

• €36 301 – €60 000: 30%

• €60 001 and above: 35%

Social insurance is a mandatory contribution that covers benefits like pensions and unemployment. In Cyprus in 2025, the rate is 8.8% of your gross salary for employees. However, it cannot exceed €488.49 per month, which amounts to €5,861.88 annually.

Health insurance (GESY) is a contribution to Cyprus's national healthcare system. The 2025 rate is 2.65% of your gross salary for employees.

Taxable income is the portion of your income subject to tax after deducting allowable exemptions and contributions.

Income tax is a direct government levy on an individual’s earnings, calculated on your taxable income(gross income minus allowable deductions) by applying the relevant tax rates.