What is the income tax rate in Cyprus?

Lately, more and more specialists are moving to Cyprus, especially in the IT industry, working for companies registered in the republic.

Consequently, a tax is deducted from the salaries of such employees for the benefit of the state. Let's consider the types of deductions from the income of a tax resident of the Republic of Cyprus.

Types of Deductions from an Employee's Income in Cyprus

• Income Tax
• Social Insurance
• Contribution to the Healthcare System

Income Tax

Cyprus applies a progressive tax rate — the higher the income, the higher the tax. The tax is calculated on the following scale:

• income less than 19,500 euros per year is not subject to tax;
• income from 19,501 to 28,000 euros per year is taxed at a rate of 20%;
• income from 28,001 euros to 36,300 euros per year is taxed at a rate of 25%;
• income from 36,301 euros to 60,000 euros per year is taxed at a rate of 30%;
• income over 60,000 euros per year is taxed at a rate of 35%.

Read below on how to calculate the tax base, from which deductions are made.

Social Insurance

The total rate for contributions to the social insurance fund is 8.3% of the employee's salary. If the monthly income exceeds 5005 euros, the rate is fixed at 415.5 euros.

Contribution to the Healthcare System

The healthcare system in Cyprus is called GESY (from Greek Γενικό Σύστημα Υγείας or abbreviated as ΓεΣΥ). The contribution to this fund is 2.65%, without an upper limit.

• Learn more about healthcare in Cyprus

Frequently Asked Questions about Taxes in Cyprus

How to Calculate the Tax Base?

To do this, subtract 8.3% (contribution to the social insurance fund) and 2.65% (contribution to the healthcare system) from the employee's salary.
For example, if the salary before all deductions is 3000 euros per month, it amounts to 36,000 euros per year. Subtracting 8.3% (2988 euros) and 2.65% (954 euros) gives 32,058 euros, which is the tax base.

How to Calculate the Tax Correctly?

Using the example above, the tax base is 32,058 euros. From this amount, deduct the non-taxable 19,500 euros, resulting in 12,558 euros. However, the 20% rate applies to a tax base up to 28,000 euros, so to calculate the 20% tax, subtract the non-taxable portion from the upper limit (28,000 - 19,500), resulting in 8,500 euros. The remaining 4,058 euros (32,058 - 28,000) will be subject to a 25% tax.

Therefore, the annual tax for a monthly income of 3000 euros will consist of 1700 euros (20% of 8500) and 1014.5 euros (25% of 4058), totaling 2714.5 euros.

What are the Employer's Expenses?

The employer also makes contributions to the funds described above, and for financial planning, some figures should be added to the payroll fund:

• 8.3% to the social insurance fund
• 2.9% to the healthcare fund
• 2% to the social solidarity fund
• 1.2% to the unemployment fund
• 0.5% to the industrial training fund

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Frequently Asked Questions about Temporary Protection for Ukrainian Citizens in Cyprus

How to apply for temporary protection?

Protection is provided by the Asylum Service. You can apply either in person at the migration department or online on this website. Click on the blue banner below the photo to access the Google form for filling out. Just in case, here is the link to the form.

In the application, you will need to provide a local phone number, so make sure to get a Cypriot SIM card in advance.

Once your documents are reviewed, you will receive a letter. Within two days of receiving it, you must visit the migration department to obtain a residence permit.

Where to find the addresses of migration departments for submitting applications?

• Nicosia, 79 Arch. Makarios III Avenue, Afemia House 1077, Nicosia
• Larnaca, 34 Tasou Mitsopoulou, Larnaka 6027
• Limassol, 223 Fragklinou Rousvelt, Building "D. Nikolaou", 2nd floor, Limassol 3046
• Paphos, Corner of Eleftheriou Venizelou & Kanigkos 22, 2nd floor, Paphos, 8021
• Famagusta, 83 Eleftherias Street, TAPOLOS Bld, Deryneia Plaza, 1st floor, Deryneia 5380

Where can I apply for financial assistance?

Applications for payments are accepted at social security offices, here are their addresses:

• Nicosia, Kalimakli, Nicosia, Cyprus: +357 22804780
• Limassol, Address: 82nd Road No. 3; Kato Polemidia, Limassol, Cyprus: +357 25821895
• Larnaca, 23-25 Pileiou 23-25, C. Matthaiou Court, 4th floor, P.O.Box 40184, Larnaca, Cyprus: +357 24800207 or 54 Agion Anargyron Avenue, P.O48
• Paphos, I. Nikolaidov 19, Paphos, Cyprus: +357 97 869158
• Famagusta, 170 April 1, Paralimni, Cyprus: +357 23811720

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