Freelancers and sole traders pay the same income tax bands as employees, but higher social contributions. Here's the picture.
Self-employed individuals are taxed on their profits using the same progressive bands as employees: €22,000 tax-free, then 20%, 25%, 30% and 35%. See the 2026 tax bands for the full table. You deduct allowable business expenses to arrive at taxable profit.
| Contribution | Employee | Self-employed |
|---|---|---|
| Social Insurance | 8.8% | 16.6% |
| GESY | 2.65% | 4.00% |
Because there is no employer to pay a matching share, self-employed Social Insurance is higher at 16.6%, charged on notional income bands set by the state according to your profession. GESY is 4.00% of income.
The registration path is a short, ordered sequence: sort out residency, get your tax ID, then register for contributions — and for VAT if it applies. The order matters, so you can start working legally without delays.
EU/EEA nationals register for an MEU1 certificate (the "yellow slip"); non-EU nationals need the correct residence and work permit first.
Before you startApply for a Tax Identification Number (TIN) through the Tax For All (TFA) portal. This is the tax ID used for everything that follows.
Get your TINSubmit form YKE.1-002 within two months of starting. You then owe the 16.6% self-employed contribution on the notional (minimum insurable) income set for your profession.
Within 2 monthsHealth-system registration, so your 4% GESY contribution is collected alongside Social Insurance.
4% GESYMandatory once turnover passes €15,600, and immediately for certain cross-border services. Below the threshold it is optional.
Turnover > €15,600Pay Social Insurance quarterly, provisional tax in two instalments, file your annual income tax return, and keep proper books and receipts.
OngoingFor the same headline income, a self-employed person usually keeps less than an employee once the higher 16.6% + 4% contributions are applied — though allowable expenses and, in some cases, the flat notional bands can work in your favour. Contributions remain deductible for income tax.
Unlike employees, self-employed Social Insurance is charged on notional (minimum insurable) income bands set by the state for each profession and level of experience — not simply on your actual profit. That means there's a floor on contributions even in a lean year, and the exact band depends on your occupation. GESY, by contrast, is charged as 4% of income.
You're taxed on profit, not turnover, so legitimate business expenses lower your taxable income: things like professional fees, business travel, equipment, a proportion of home-office costs, insurance and accountancy. Keep records and receipts — proper bookkeeping is what turns the higher contribution rates into a fair overall bill.
Self-employed people pay provisional tax in two instalments during the year, based on an estimate of that year's income, with a balancing payment after the year ends. Underestimating significantly can trigger a surcharge, so a realistic estimate matters. VAT registration becomes mandatory once turnover passes the threshold (currently €15,600).
For the same headline income, a self-employed person usually keeps less after the higher 16.6% + 4% contributions — but allowable expenses, the flat notional bands, and greater control over how you work can offset that. Because the rules hinge on your profession's bands and your expenses, treat the calculator as an employee-focused estimate and confirm self-employed planning with an accountant.
Disclaimer: This page is general information about self-employment in Cyprus for 2026, not legal, tax or financial advice. Rates, thresholds, forms and procedures change and can vary by profession and personal circumstances. Always confirm the current requirements with the Cyprus Tax Department, the Social Insurance Services and a licensed accountant before acting. cyprussalary.com accepts no liability for decisions taken on the basis of this information.