Taxes in Cyprus

Employer Contributions in Cyprus

Employer Social Security contribution breakdown

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

Employee Contributions in Cyprus

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.

Employee Social Security contribution breakdown

Tax rebates and thresholds

Personal Allowance

Individuals with 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