DoubleTaxationTaxes on salary: Cyprus preliminary data
How much income tax and social contributions are paid on a salary in Cyprus, what a sole proprietor and a company pay, and which special regimes exist. Preliminary data.
Preliminary data: headline rates from official sources and bulletins of international organisations, without reliefs or special rules; being refined.
Calculation for a gross salary of €60,000 per year
| Gross salary | €60,001 |
|---|---|
| Income tax | €7,821 |
| Employee contributions | €6,930 |
| Take-home pay | €45,249 |
| Employer contributions and payroll taxes | €9,300 |
| Employer's labour cost | €69,301 |
Only some of the country's direct taxes and levies are counted: income tax on wages and compulsory contributions. Not counted: property and real-estate taxes; taxes on dividends, interest and other investment income; inheritance and gift taxes; indirect taxes such as VAT, excise and customs duties.
Taxes for sole proprietors and companies
Tax and contributions on the profit for a year; expenses are 10% of revenue, the company pays its profit out to the owner. Reliefs and local taxes are not included.
| Annual revenue | €30,000 | €60,000 | €120,000 |
|---|---|---|---|
| Sole proprietor | €5,616 20.8 % | €15,963 29.6 % | €36,433 33.7 % |
| Company | €5,198 19.3 % | €10,395 19.3 % | €20,790 19.3 % |
Special tax regimes
Απαλλαγή 50% αμοιβής από εργοδότηση (50% exemption for high earners)
For people relocating
Who: Individuals not resident in Cyprus for at least 15 consecutive years before first employment in Cyprus, starting from 1 Jan 2022.
50% of employment income exempt from income tax for 17 years in any year pay exceeds EUR 55,000.
Legal basis: Income Tax Law 118(I)/2002 art. 8(23A)
Απαλλαγή 20% (max EUR 8,550) για πρώτη εργοδότηση
For people relocating
Who: Individuals employed abroad by a non-resident employer for 3 consecutive years before first employment in Cyprus starting up to 2027.
20% of employment income, capped at EUR 8,550 a year, exempt for 7 years.
Legal basis: Income Tax Law 118(I)/2002 art. 8(21A)
Απαλλαγή 25% (max EUR 25,000) για επαναπατρισθέντες (returning Cypriots / diaspora)
For people relocating
Who: Former residents who were non-resident for the previous 7 tax years, start work or business in Cyprus 2025-2030 with income above EUR 30,000 in the first 12 months, and have a recognised degree plus 36 months full-time work abroad (or other listed conditions).
25% of employment income or business profit exempt, max EUR 25,000 a year, in the starting year and the next 6 years.
Legal basis: Income Tax Law 118(I)/2002 art. 8 (paragraph before 8(22), introduced 2025)
Μη κατοικία (non-domiciled resident) — exemption from Special Defence Contribution
For investors · rate 0.0 %
Who: Cyprus tax residents not domiciled (and not deemed domiciled) in Cyprus under the SDC law.
Dividends (and passive interest) of a tax-resident individual who is not domiciled in Cyprus are exempt from Special Defence Contribution; dividends are also exempt from income tax.
Legal basis: Special Defence Contribution Law 117(I)/2002 art. 2 (domicile) and art. 3
Tax residence
The tax residence check does not cover Cyprus yet.
Assumptions
- Calculated with the OECD Taxing Wages methodology: income tax including local taxes plus employee social security; single person without children, tax year 2026, ECB rate of 2 January 2026.
- Exchange rate: 1 EUR = 1.000012 EUR (ECB euro reference rate, 2026-01-02) ↗
Sources
- CyLaw (Cyprus Bar Association legal database) — Income Tax Law 118(I)/2002, consolidated, Second Annex (2026 scale, 15% CIT) (law text from a third-party publisher; no official copy found)
- CyLaw — Income Tax Law 118(I)/2002 art. 8 (exemptions) (law text from a third-party publisher; no official copy found)
- CyLaw — Special Defence Contribution Law 117(I)/2002, consolidated (5% on dividends of resident individuals) (law text from a third-party publisher; no official copy found)
- CyLaw — Social Insurance Law 59(I)/2010, consolidated (arts. 5 and 12 contribution rates) (law text from a third-party publisher; no official copy found)
- Health Insurance Organisation — GHS financing: contribution rates and EUR 180,000 cap
Data checked: 2026-11-08. An indicative calculation for a typical case. Not tax advice.