Cyprus Income Tax Calculator 2026

Calculate your income tax with all deductions and exemptions

🐸 2026 Tax Brackets

💱 How Tax is Calculated - Step by Step

1

Start with Gross Income

Total income from all sources: employment, business, pensions, rental income, etc.

2

Subtract Exempt Income

NOT taxable:

  • ✓ Dividend income (100% exempt)
  • ✓ Interest income (generally exempt)
  • ✓ Child allowances
  • ✓ Student grants
3

Apply Standard Deductions

Limited to 1/5 (20%) of income:

  • ✓ Social insurance contributions
  • ✓ Pension fund contributions
  • ✓ Life insurance premiums (max 7% of coverage)
  • ✓ Medical insurance premiums
  • ✓ GHS contributions
4

Apply Progressive Tax Brackets

Tax brackets include €22,000 tax-free allowance (0% rate) + progressive rates

Example: If net income = €50,000
• First €22,000 @ 0% = €0
• Next €10,000 (€22,001-€32,000) @ 20% = €2,000
• Next €10,000 (€32,001-€42,000) @ 25% = €2,500
• Next €8,000 (€42,001-€50,000) @ 30% = €2,400
Total Base Tax = €6,900
5

Apply Personal Deductions

Reduce taxable income (subject to income criteria):

  • ✓ Children deductions (€1,000-€1,500 each)
  • ✓ Housing costs (up to €2,000)
  • ✓ Green investments (up to €1,000)
  • ✓ Home insurance (up to €500)
6

Calculate Final Tax

Apply progressive tax brackets to the income after all deductions

🤑 Important Distinction:

Standard Deductions (Step 3):

Reduce your taxable income. Limited to 20% of income (1/5 rule). Includes social insurance, pension contributions, life insurance, medical insurance.

Personal Deductions (Step 5):

Also reduce your taxable income. Subject to income eligibility criteria. Includes children, housing, green investments, home insurance.

Both types of deductions reduce income BEFORE tax is calculated, resulting in lower tax liability.

👤 Personal Information

Total income before any deductions

👨‍👩‍👧‍👦 Dependent Children

Children under 18, students under 24, or permanently disabled

🏠 Housing Expenses

⚡ Energy Efficiency & Green Investments

🛡️ Insurance

Maximum deduction: €500 (no income criteria)
Subject to 1/5 rule (20% of net income limit)
Subject to 1/5 rule (20% of net income limit)

💰 Exempt Income (Not Taxable)

Dividends are tax-exempt
Interest income is generally tax-exempt

📝 Detailed Calculation Examples

Example 1: Single Person with No Dependents

Profile: Single employee earning €35,000/year

Gross Income: €35,000.00
Social Insurance (€3,500): - €3,500.00
Net Income: €31,500.00
Tax Calculation:
€22,000 @ 0%: €0.00
€9,500 @ 20%: €1,900.00
Final Tax: €1,900.00
Effective Rate: 5.43%

Example 2: Married Couple with 2 Children

Profile: Both spouses working, €45,000 + €35,000, 2 children, paying €10,000/year rent

Person 1 Calculation:

Gross Income: €45,000.00
Standard Deductions: - €4,000.00
Net Income: €41,000.00
Tax Calculation:
€22,000 @ 0%: €0.00
€10,000 @ 20%: €2,000.00
€9,000 @ 25%: €2,250.00
Base Tax: €4,250.00
Less: Personal Tax Credits
1st Child: - €1,000.00
2nd Child: - €1,250.00
Rent (max €2,000): - €2,000.00
Final Tax Person 1: €0.00

Tax credits exceed base tax, so final tax is €0

Example 3: High Earner with All Deductions

Profile: €100,000 income, married, 3 children, €2,500 mortgage interest, €8,000 solar panels

Gross Income: €100,000.00
Standard Deductions (20% limit = €20,000): - €12,000.00
Net Income: €88,000.00
Tax Calculation:
€22,000 @ 0%: €0.00
€10,000 @ 20%: €2,000.00
€10,000 @ 25%: €2,500.00
€30,000 @ 30%: €9,000.00
€16,000 @ 35%: €5,600.00
Base Tax: €19,100.00
Less: Personal Tax Credits
Children (€1,000 + €1,250 + €1,500): - €3,750.00
Mortgage Interest (max €2,000): - €2,000.00
Green Investment (max €1,000): - €1,000.00
Final Tax: €12,350.00
Effective Rate: 12.35%

Note: Remaining €7,000 of solar panel expense can be carried forward for up to 4 years (€1,000/year)