Following the reform effective 1 January 2026, the tax-free threshold rose to €22,000 and the bands were widened.
Calculate my net salary →| Taxable income | Rate |
|---|---|
| €0 – €22,000 | 0% |
| €22,001 – €32,000 | 20% |
| €32,001 – €42,000 | 25% |
| €42,001 – €72,000 | 30% |
| Over €72,000 | 35% |
The bands are progressive: each rate applies only to the slice of income inside that band, not to your whole salary. Earning €1 into a higher band never reduces your take-home pay.
Income tax in Cyprus is charged on your gross pay after deducting your Social Insurance (8.8%) and GESY (2.65%) contributions, which are tax-deductible. So the taxable figure is lower than your headline gross.
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Cyprus income tax is progressive and marginal: each band's rate applies only to the slice of income that falls inside it, not to your whole salary. So a higher salary never leaves you worse off — only the euros above each threshold are taxed at the higher rate. The first €22,000 is tax-free for everyone.
Take a €40,000 annual taxable income (after Social Insurance and GESY, which are deducted before income tax). The first €22,000 is tax-free. The next slice from €22,001 to €30,000 (€8,000) is taxed at 20% = €1,600. The slice from €30,001 to €40,000 (€10,000) is taxed at 25% = €2,500. Total income tax is roughly €4,100 — an effective rate of about 10%, even though the top marginal rate touched is 25%. The salary calculator does this automatically and also subtracts Social Insurance and GESY first.
Taxable income is your gross employment income minus contributions that are deductible for tax — chiefly Social Insurance and GESY — and any reliefs you qualify for. Certain items (like part of an approved pension contribution, or the 50% expat relief for qualifying new arrivals earning over €55,000) reduce the amount that reaches the bands.
The headline change is the tax-free threshold rising from €19,500 to €22,000, with the bands above it restructured to 20%, 25%, 30% and 35%. For most employees this lowers the tax bill at the lower and middle of the scale. Because rates can be revised, always check the current position with the Cyprus Tax Department before relying on a figure.