Cyprus Payroll Changes

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.

Cyprus Payroll Changes - 2026