Cyprus Tax Reform 2026 vs 2025: What Actually Changed, in Numbers
· Demetris D.
The Cyprus Tax Reform Law was published in the Gazette on 31 December 2025 and applies from 1 January 2026. It is the largest personal tax change since 2003. Strip away the commentary and three things changed for employees: the brackets moved, new deductions appeared, and everything else stayed put.
Change 1: the brackets moved up
| 2025 bands | 2026 bands | Rate |
|---|---|---|
| €0 to €19,500 | €0 to €22,000 | 0% |
| €19,500 to €28,000 | €22,000 to €32,000 | 20% |
| €28,000 to €36,300 | €32,000 to €42,000 | 25% |
| €36,300 to €60,000 | €42,000 to €72,000 | 30% |
| Above €60,000 | Above €72,000 | 35% |
Every threshold rose. The tax free band gained €2,500, and the 35% band now starts €12,000 later. Full worked examples are in the 2026 brackets guide.
Change 2: what that is worth at your salary
Net gain per year under the 2026 rules versus 2025, same gross, no deductions claimed:
| Gross / year | 2025 net | 2026 net | You keep extra |
|---|---|---|---|
| €25,000 | €21,610 | €22,110 | €500 |
| €30,000 | €25,152 | €25,652 | €500 |
| €35,000 | €28,544 | €29,194 | €650 |
| €40,000 | €31,865 | €32,565 | €700 |
| €45,000 | €35,008 | €35,886 | €877 |
| €50,000 | €38,108 | €39,093 | €985 |
| €60,000 | €44,306 | €45,291 | €985 |
| €70,000 | €50,599 | €51,557 | €958 |
| €80,000 | €56,927 | €58,372 | €1,445 |
| €100,000 | €69,582 | €71,036 | €1,454 |
| €120,000 | €82,238 | €83,692 | €1,454 |
Two reading notes. Salaries under about €22,000 see no change because they paid no income tax under either rule set. And the gain is not monotonic in the middle: €50,000 to €70,000 all land near €985 because the band boundaries shift in offsetting ways. The calculator shows your exact 2025 vs 2026 delta side by side.
Change 3: new deductions for families and housing
The reform introduced deductions that 2025 never had: per child allowances, rent or mortgage interest on a primary residence, green home upgrades, and disaster home insurance, all subject to income eligibility caps. For an eligible family these can dwarf the bracket gains; a parent of two on €30,000 claiming €2,000 of housing saves another €850 on top of the €500 above. Details and caps in the new deductions guide.
What did not change
- Social insurance: 8.8%, with the routine annual ceiling adjustment to €5,742 a month (details)
- GeSY: 2.65% employee rate, €180,000 cap (details)
- The deduction order: contributions first, then income tax on the remainder
Frequently asked questions
When did the 2026 reform take effect? 1 January 2026, for income earned from that date. Your 2025 income is settled under the old rules.
Do I need to do anything to get the new brackets? No. Employers apply them through payroll withholding automatically. The new deductions, by contrast, must be claimed; keep documentation.
Did the reform change corporate or non dom rules? The reform package also touched other areas, including the corporate rate, but for employees the bracket and deduction changes above are what move net pay. New residents should also read the 50% exemption guide.