Cyprus personal income tax is levied on the worldwide income of Cyprus tax residents and on Cyprus-source income of non-residents. The tax-free threshold is €19,500 per year. Income between €19,501 and €28,000 is taxed at 20%, income between €28,001 and €36,300 at 25%, income between €36,301 and €60,000 at 30%, and income exceeding €60,000 at 35%. These brackets make Cyprus one of the most favourable income tax environments in the European Union for middle and senior-level professionals.
Employment income is subject to withholding tax under the PAYE system. Employers are required to calculate and deduct income tax monthly and remit it to the Tax Department. Annual employer returns must reconcile total payroll against tax deducted. Employees must also file a personal tax return where their gross income exceeds €19,500.
When combined with the 50% income tax exemption for high earners arriving in Cyprus, or with the non-domicile exemption from SDC on investment income, the effective tax burden for internationally mobile executives can be substantially below the headline rates. This positions Cyprus as a particularly attractive destination for companies relocating key personnel from high-tax jurisdictions.