Cyprus Payroll Changes - 2026

Minimum salary/Wage changes

• Monthly minimum wage (Effective Jan 1, 2026)

  • Standard rate: €1,088 (for full-time employees with at least 6 months of continuous employment with the same employer).
  • Initial rate: €979 (for workers who have not yet completed 6 months of continuous employment).

Rate/Percentage changes affecting payroll

• New PAYE tax bands (tax reform effective Jan 1, 2026)

  • 0%: €0 – €22,000
  • 20%: €22,001 – €32,000
  • 25%: €32,001 – €42,000
  • 30%: €42,001 – €72,000
  • 35%: €72,001 and above

• Social insurance maximums

  • Monthly cap: Increases to €5,742.
  • Annual cap: Increases to €68,900.

Other payroll-impacting changes

• New tax deductions (must be claimed via Form IR59)

  • Note: These are not automatic; employees must claim them by filing the IR59 form (2026 version pending).

  • Family deductions:

    • Amounts: €1,000 (1st child), €1,250 (2nd child). Rates for 3rd+ child pending publication.
    • Eligibility thresholds (family income): Max €100,000 (1-2 children), €150,000 (3-4 children), €200,000 (5+ children).
    • Age limit: Up to 23 for women, 24 for men (students/children).

  • Housing & lifestyle deductions:

    • Loan interest/rent: €2,000 deduction.
    • Green investment/electric vehicle: €1,000 deduction.
    • Home insurance (natural disasters): Up to €500 deduction.

    Download 2025 vs. 2026 Cyprus Tax Comparison PDF (Rates & Impact)