Cyprus tax calculator

This calculator may come in handy for those who are looking to relocate to Cyprus and hold their first job here.

Based on current immigration laws, the minimum monthly salary for relocation of foreign nationals is 2,500 EUR.

It is compulsory for every employee in Cyprus to be insured with the Social Insurance Scheme. The contribution rate for any employed person is 8.8%, which is deducted from their monthly salary. The maximum deduction is 488.49 EUR per month.

All employees who contribute to the Social Insurance are eligible to receive the following benefits:

• Sickness benefit
• Maternity grant
• Maternity allowance
• Unemployment benefit
• Old-age pension

The General Health System (GHS), or GeSY, is a national health system implemented in Cyprus in June 2019.

It aims to provide affordable and effective medical care to Cyprus residents:

• All citizens (permanent and legal residents in Cyprus) can register for and access GeSY.
• All expatriates living in Cyprus who hold a Cypriot ID or Alien Card are entitled to enroll in GeSY.
• Citizens can choose their own doctor, hospital, or any other healthcare provider, whether from the public or private sector.
• The chosen healthcare providers must be associated with GeSY.
• Hospitals, doctors' surgeries, clinics, and pharmacies under GHS can be identified by the GeSY/ ΓεΣΥ signage on display.

The Health Insurance Organisation manages the system and is funded by contributions deducted from the employees’ monthly salaries. Contributions are 2.65% for employees.

Income tax is applied to individuals who earn an income from Cyprus, regardless of whether they are residents of Cyprus.

A person is considered a resident if:

• They are present in Cypriot territory for a period exceeding 183 days.
• And they are subject to income tax from sources within Cyprus or abroad.

Cypriot taxable income varies from 0% to 35% depending on income:

• The first 19,500 EUR is tax-free.
• Progressive rates will apply for personal taxation up to 35%.

Personal deductions are possible through:

• Donations to approved charities
• Life insurance premiums
• Medical fund contributions
• Pension plan contributions

Certain types of income can be taxed at different rates. Personal income tax is imposed on all types of business profits, discounts, pensions, rents, royalties, benefits in kind, and others.

Chargeable income, also known as taxable income, is your total annual income minus all the tax exemptions and tax reliefs you’re entitled to. The exemptions and reliefs can include:

• Social Insurance deduction
• National Health System (NHS)
• First employment deduction
• Provident Fund
• Personal life insurance

A tax exemption is granted for any employment exercised in Cyprus:

• By an individual who was a resident outside of Cyprus.
• Before the commencement of their first employment in Cyprus.

Tax exemption takes into account your annual gross income from any activity in Cyprus. The percentage of your exemption is applied as per the rates below.

Based on the updated Cyprus Income Tax Law, individuals who take up their first employment in Cyprus from 1 January 2022 onwards will be eligible for the 50% tax exemption from their employment income. 

However, they must fulfill the following conditions:

• The individual has not been a Cyprus tax resident for at least 15 consecutive years before starting their first employment in Cyprus.
• The individual remained continuously employed from the start date of their first employment.
• The annual remuneration from employment in Cyprus must exceed 55,000 EUR (This annual remuneration threshold of 55,000 EUR can be achieved in their first or second year of employment in Cyprus).

Important: This exemption is available for a maximum of 17 years and can be utilized from the year of commencement of employment in Cyprus. If the relevant conditions are not satisfied in a tax year (e.g., annual remuneration is less than 55,000 EUR), the exemption will not be granted for that specific tax year.

You can qualify for the 20% tax exemption:

• If you’re an employee with a yearly salary of less than 55,000 EUR from any employment in Cyprus, and your first employment started after 26/07/2022. Eligibility must be reviewed separately for employment before this date.   
• For individuals who were not tax residents for three years before their first employment in Cyprus, the maximum exemption is 8,550 EUR. This is applicable only if you were employed abroad full-time during that time, and your first employment in Cyprus started within four months after leaving your last employer.

The tax exemption applies for seven years, starting from the year after the first employment year.

The calculation is as below:

Annual gross salary - annual tax discount (if applicable) - annual GeSY -  annual social insurance = Annual taxable income

Then apply the percentage according to the tax scale:

Annual income tax / employment months = your monthly tax.

No monthly tax will be applied if your chargeable income is lower than 19,500 EUR. 

If your chargeable income is over 19,500 EUR, the tax applied to that amount is divided by the remaining months of the year. This way, an equal installment is paid each month.

If you’re entitled to a bonus in a specific month, the extra tax amount will be deducted for that month. From the following month onwards, your regular tax will be deducted as per the previous months.

The calculator is intended as a guide to help you understand the deductions you can expect from your salary when working in Cyprus. Please keep in mind that these results are estimates based on the assumption that you will be employed in Cyprus for at least 12 months.

While we strive to use up-to-date values in the calculation, we cannot guarantee their validity. Therefore, we cannot be held responsible for any mistakes or problems that may occur when using this tool.