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

Every employee in Cyprus is compulsorily insured under the Social Insurance Scheme. For employed persons, the rate of contribution is 8.8%, which is deducted from the monthly salary with a maximum deduction of €461.03 per month.

All employees that contribute to the Social Insurance are able to receive the below benefits:

• Sickness benefit

• Maternity grant

• Maternity allowance

• Unemployment benefit

• Old-age pension

The General Health System (GHS) is a national health system that was implemented in Cyprus in June 2019, also known as GeSY.

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 and holding a Cypriot ID or Alien Card are also entitled to enroll in GeSY.

• Citizens can choose their personal doctor, hospital or any other healthcare provider, 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 system is run by the Health Insurance Organisation, and is funded by contributions taken from the monthly salary of employees. Contributions are 2.65% for employees.

The income tax is applied to individuals who earn income from Cyprus, regardless whether they are Cyprus residents or not.

A person is considered a resident if:

• They are present on Cypriot territory for a period of time exceeding 183 days.

• And they’ll be subject to income tax from sources within Cyprus or abroad.

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

• The first €19,500 is tax-free.

• Progressive rates will apply for personal taxation up to a percentage of 35%.

Personal deductions apply and 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. The 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.

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 on that 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 prior to the commencement of their first employment in Cyprus.

• The annual remuneration from employment in Cyprus must exceed €55,000 (This annual remuneration threshold of €55,000 can be achieved either in the first or second year of employment in Cyprus).

Important: This exemption is available for a maximum period 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), 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 from any employment in Cyprus.

• For individuals who were not tax residents for 3 years before the first employment, the maximum exemption is €8,550.

The tax exemption applies for 7 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.

If your chargeable income is lower than €19,500, then no monthly tax will be applied. 

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

If in a specific month, you’re entitled to a bonus, then the extra tax figure will be deducted in that specific month. From the next month on, you’ll be deducted the normal tax 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 and are 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.