Country Guides

Taxes in Cyprus

Employer social security contribution

Contribution: Social Insurance

Contribution amount: 8.8%

Contribution: Redundancy Fund

Contribution amount: 1.20%

Contribution: Industrial Training Fund

Contribution amount: 0.5%

Contribution: Holiday Fund (if not exempted)

Contribution amount: 8%

Contribution: Social Cohesion Fund

Contribution amount: 2%

Social security contributions for employers in Cyprus is 8.8% regardless of gross salary.

In Cyprus, individual income tax is progressive, with rates ranging from 0% to 35% depending on income brackets. Contributions go towards social security, healthcare, pensions, and other public services. Both employees and employers must contribute to social insurance, which covers benefits such as unemployment, disability, maternity, and retirement.

Income tax

The employee’s income tax rate in Cyprus is progressive, with rates ranging from 0% to 35%, depending on the individual’s gross income.

Income tax

Gross income: €0 - €19,500

Tax rate: 0%

Gross income: €19,501 - €28,000

Tax rate: 20%

Gross income: €28,001 - €36,300

Tax rate: 25%

Gross income: €36,301 - €60,000

Tax rate: 30%

Gross income: Above €60,000

Tax rate: 35%

Employee Social Security contribution

Gross income: Social Insurance

Tax rate: 8.3%

Gross income: National Health Insurance System (NHIS)

Tax rate: 2.65%

Tax rebates and thresholds

  • Personal allowance: Individuals with an annual income below €19,500 are not subject to income tax.
    • Threshold: Up to €19,500
  • Social insurance contributions: Employee contributions to the Social Insurance Fund are 100% deductible from taxable income.
    • Threshold: Up to 1/6 of chargeable income
  • Contributions to approved pension funds: Contributions to approved pension, provident, and medical funds are deductible up to 1/6 of the individual’s taxable income.
    • Threshold: Up to 1/6 of chargeable income
  • Life insurance premiums: Premiums paid on life insurance policies are deductible, provided the policy’s capital sum is at least 7 times the annual premium.
    • Threshold: Up to 7% of the insured sum
  • Donations to approved charities: Any donations made to approved charitable organisations are 100% deductible from taxable income.
    • Threshold: No specific threshold
  • Student loan interest payments: Interest on loans for a student’s first degree or postgraduate education is deductible from taxable income.
    • Threshold: No specific threshold
  • Medical fund contributions: Contributions to approved medical funds are 100% deductible.
    • Threshold: No specific threshold
  • Annual subscription to professional bodies: Subscriptions to approved professional bodies are 100% deductible from taxable income.
    • Threshold: No specific threshold
  • Investment in innovative SMEs: Investments made in innovative small and medium-sized enterprises (SMEs) are eligible for a tax rebate, subject to certain limits.
    • Threshold: Deduction of up to 50% of taxable income (with a cap of €150,000)
  • Rent deduction for individuals: Individuals renting out property can claim a 20% tax deduction on rental income.
    • Threshold: Up to 20% of gross rental income

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