Cyprus income tax bands for 2026

Following the reform effective 1 January 2026, the tax-free threshold rose to €22,000 and the bands were widened.

The 2026 tax bands

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.

What counts as taxable income

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.

Worked example: €40,000 gross

• Social Insurance: 8.8% × €40,000 = €3,520
• GESY: 2.65% × €40,000 = €1,060
• Taxable income: €40,000 − €3,520 − €1,060 = €35,420
• Tax: 0% on first €22,000 + 20% on next €10,000 (€2,000) + 25% on €3,420 (€855) = €2,855
• Net: €40,000 − €3,520 − €1,060 − €2,855 = €32,565

Want your own figure? The calculator does this instantly and also handles 13th/14th salaries and the employer cost.

What changed in the 2026 reform

• Tax-free threshold raised from €19,500 to €22,000.
• Top 35% band entry moved from €60,000 to €72,000.
• New family allowances were introduced for qualifying households.