Republic of Cyprus
Cyprus tax, worked out
Free 2026 calculators for individuals, companies and business owners: income tax, Social Insurance and GESY, the relocation exemptions, what a company's profit is worth after corporate and dividend tax, and whether a company or sole trader keeps more of your profit.
≈ €0 / month gross
50%: first employment in Cyprus, pay over €55,000, up to 17 years.
25%: "Minds in Cyprus", pay over €30,000, capped at €25,000 a year.
rate
Where it goes
Assumptions and what's not included
- Income tax bands (2026): 0% to €22,000 · 20% to €32,000 · 25% to €42,000 · 30% to €72,000 · 35% above. Each rate applies only to the slice of income in its band.
- Social Insurance: 8.8% employee / 16.6% self-employed on earnings up to the 2026 ceiling of €68,904. GESY (GHS): 2.65% employee / 4.00% self-employed on income up to €180,000. Both are deducted before income tax is calculated. Self-employed people pay on minimum insurable earnings set by occupation, which this tool doesn't model.
- 50% exemption: first employment in Cyprus with annual pay over €55,000, no Cyprus tax residency or employment in the 15 prior consecutive years, up to 17 tax years. 25% "Minds in Cyprus" exemption: 25% of qualifying income, capped at €25,000 a year, for the year of commencement plus six more, for income over €30,000 and no Cyprus residency in the prior seven years. This tool treats the two as alternatives and doesn't check your eligibility.
- Family deductions (per parent): €1,000 for the 1st child, €1,250 for the 2nd, €1,500 for the 3rd and each further child; doubled for a single parent. They apply only if family income is under €100,000 (1–2 children), €150,000 (3–4) or €200,000 (5+). The tool uses the income you enter as a stand-in for family income and models one parent's deduction. Some sources describe the child relief as usable only up to the tax actually due, so check how it applies to you.
- Not modelled: rent, mortgage-interest, energy and insurance deductions, pension and other Article 14 deductions, employer contributions, benefits in kind, and income other than the salary or profit you enter.
Company
A loss means no corporate tax for the year. Carrying losses forward (up to seven years) isn't modelled, so this shows €0 profit.
80% of this portion is exempt. The remaining 20% is taxed at 15%, about 3% effective.
Deduction = new equity × reference rate, capped at 80% of taxable profit after any IP Box exemption.
2026 rate = 10-year government bond yield (31 Dec 2025) of the country where the equity is used, plus 5%. The default 8.049% is for equity used in Cyprus (3.049% + 5%). Other countries differ - see the Cyprus Tax Department's published table.
Corporate tax
corp. rate
Dividend to shareholder
% of profit
Assumptions and what's not included
- Corporate income tax: flat 15% on taxable profit of Cyprus tax-resident companies from 1 January 2026 (up from 12.5%). Companies incorporated in Cyprus are tax resident by default from 2026.
- IP Box: 80% of qualifying IP profit is exempt under the OECD nexus approach, so the effective rate on that portion is about 3% (20% × 15%). The benefit is proportionate to qualifying R&D spend, which this tool doesn't test.
- Notional Interest Deduction: new equity introduced since 1 January 2015 × reference rate (10-year government bond yield at 31 December of the prior year, plus 5%), limited to 80% of the taxable profit generated by the assets the equity funds. It can't create a tax loss and the excess isn't carried forward. This tool approximates the cap using the whole taxable profit after IP Box.
- Dividends: Special Defence Contribution on dividends from post-2026 profits is 5% for Cyprus-domiciled residents and 0% for Non-Domiciled individuals, for 17 years from first becoming Cyprus tax resident (extendable twice by five years for a €250,000 lump sum each). Deemed dividend distribution rules are abolished from 2026 profits. GESY on dividends is 2.65%, with annual income capped at €180,000 across all sources; this tool applies the cap to the dividend alone.
- Not modelled: group relief, loss carry-forward (now up to seven years), the participation exemption on dividends received, the R&D super-deduction, tonnage tax, and withholding tax on payments to non-residents or low-tax jurisdictions. The model covers one standard Cyprus company paying one individual shareholder.
Your business
Income minus business costs, before any salary or drawings to you. As a sole trader this whole amount is your taxable profit.
Accounting and audit above what a sole trader would pay, plus the €350 annual company levy. An estimate: use your own quotes.
Salary builds your Social Insurance record (pension and benefits) but costs more tax than dividends. Try €0 to see dividends only.
Assumes you are the only owner and take all after-tax profit out as dividends. The company is tax-resident in Cyprus and you are a Cyprus tax resident.
Which keeps more?
% of profit
| Option | Salary | Tax and contributions | % of profit | Take-home |
|---|
Take-home by salary level
Company route: where the money goes
Assumptions and what's not included
- Company route: your salary and the employer contributions on it are deductible. Corporate tax is 15% of what remains after the extra running cost, then all of the after-tax profit is paid to you as a dividend. Dividends are not subject to income tax.
- Salary side: 8.8% Social Insurance (up to €68,904) and 2.65% GESY are deducted before income tax at the 2026 bands (0% to €22,000, then 20%, 25%, 30%, 35%).
- Employer contributions: about 15.4% of salary: Social Insurance 8.8% and the Redundancy (1.2%) and HRDA (0.5%) funds, all up to €68,904; GESY 2.9% up to €180,000; Social Cohesion Fund 2.0% with no cap. Whether the Redundancy and HRDA funds apply to a director-owner depends on the circumstances: confirm with your accountant.
- Dividends: 5% Special Defence Contribution for domiciled residents, 0% for Non-Doms, plus 2.65% GESY. The €180,000 GESY income cap is applied across salary and dividend together.
- Sole trader route: the whole profit is your income: 16.6% Social Insurance (up to €68,904), 4.00% GESY (up to €180,000), both deducted before income tax. The minimum insurable earnings that apply to self-employed people are not modelled, and no bookkeeping cost is added for the sole trader.
- Cash versus cover: the tool compares take-home cash. A lower salary or lower contributions also means a lower Social Insurance record, which can affect your state pension and benefits. That trade-off is yours to weigh and is why the table shows the salary you chose and the highest-take-home salary side by side.
- Not modelled: the 50% and 25% relocation exemptions, family deductions, keeping profit in the company, several owners, other income, the notional interest deduction, the IP Box, loss relief, and company set-up costs. Anti-avoidance rules and the rules on directors' remuneration can apply. Take advice before restructuring.
Get your numbers reviewed
Non-Dom status, the relocation exemptions, IP Box and the Notional Interest Deduction all have conditions that a calculator can't check. Tell us about your situation and we'll follow up by email.
Thank you
Cyprus tax advisers
Independent firms that can help with the points above.
We may receive a fee or other benefit when you contact one of these firms through this site. This doesn't change what the calculators show.
Common questions
What are the Cyprus income tax rates for 2026?
From 1 January 2026 the first €22,000 of chargeable income is tax-free. After that: 20% from €22,001 to €32,000, 25% up to €42,000, 30% up to €72,000, and 35% above €72,000. Each rate applies only to the slice of income that falls in its band.
How much Social Insurance and GESY do I pay?
Employees pay 8.8% Social Insurance on earnings up to €68,904 a year and 2.65% GESY (the General Healthcare System contribution) on income up to €180,000. Self-employed people pay 16.6% and 4.00%. Both are deductible when income tax is calculated. Employers pay additional contributions on top, which this calculator does not show.
Who qualifies for the 50% income tax exemption?
People taking up their first employment in Cyprus with annual pay above €55,000 who were not Cyprus tax residents, and had not worked in Cyprus, for at least 15 consecutive years beforehand. Half of the employment income is exempt for up to 17 tax years. A separate 25% exemption ("Minds in Cyprus") applies to income above €30,000, with the exemption capped at €25,000 a year. The conditions are detailed, so check yours with an adviser.
What is the corporate tax rate in Cyprus?
15% from 1 January 2026, up from 12.5%. Qualifying IP profits can get an 80% exemption under the IP Box, which gives an effective rate of about 3%. Companies can also claim a notional interest deduction on new equity under the NID regime, limited to 80% of the relevant taxable profit.
How are dividends taxed for shareholders?
For dividends paid from 2026 profits, Cyprus tax-resident individuals who are domiciled in Cyprus pay 5% Special Defence Contribution. Non-Domiciled residents pay 0% for up to 17 years from becoming tax resident. Both also pay GESY at 2.65% on dividend income, within the €180,000 annual income cap.
Is it better to be a sole trader or run a company in Cyprus?
It depends on profit, residency status and how much you value Social Insurance cover. A sole trader pays 16.6% Social Insurance and 4.00% GESY plus income tax up to 35% on the whole profit. A company pays 15% corporate tax, and the owner can take dividends with 0% Special Defence Contribution (Non-Dom) or 5% (domiciled), plus 2.65% GESY. Paying a salary adds employer contributions of about 15.4% and employee contributions, so it usually lowers cash take-home but builds your Social Insurance record. The Owner planner compares the two side by side at different salary levels.
How accurate is this calculator?
It is a planning estimate based on published 2026 rates, last checked in October 2026. It does not model every deduction, relief or anti-avoidance rule, so your actual liability can differ. Please don't rely on it for a filing or a major decision without advice from a licensed Cyprus tax adviser.