A worldwide-income jurisdiction operating a partial-exemption regime for qualifying incoming professionals, layered over the country's social-security charge.
Cyprus's Cyprus 50% Employment Exemption exempts 50% of qualifying income from the progressive schedule, layered over the country's social-security charge. The effective burden on $120,000 settles at 18.4%, leaving $97,945 in hand.
A walk through the four statutory channels by which Cyprus claims part of a resident's gross compensation — followed by any special regime that overrides them.
5-bracket progressive system running from 0% to 35% on taxable income.
| Taxable income | Rate |
|---|---|
| up to 22,000 | 0.00% |
| 22,000 – 35,000 | 20.00% |
| 35,000 – 60,000 | 25.00% |
| 60,000 – 72,000 | 30.00% |
| over 72,000 | 35.00% |
On social security, employees pay 11.5%. Contributions are uncapped - high-income workers pay the full rate on every dollar.
| Instrument | $75k gross | $120k gross | $200k gross |
|---|---|---|---|
I. Statutory deductions | |||
Personal income tax Cyprus 50% Employment Exemption | −$2,717 | −$8,315 | −$21,141 |
Social security · employee 11.5% employee · uncapped | −$8,588 | −$13,740 | −$22,900 |
| Gross income | $75,000 | $120,000 | $200,000 |
| Total deductions | −$11,305 | −$22,055 | −$44,041 |
| Effective rate | 15.1% | 18.4% | |
Tax residency in Cyprus is established by the jurisdiction's headline test[1]: physical presence of more than 183 days in a rolling twelve-month period, supplemented by 183+ days or 60-day rule (60 days + not resident elsewhere + cy property + economic ties). Spouses and unemancipated minors are typically presumed to share the residency of the principal earner unless rebutted.
Once resident, any special regime is not automatic. Most jurisdictions require a formal registration with the tax authority within a defined window following arrival, together with proof of qualifying activity and a lookback period of prior non-residency. Late registration forfeits the regime for the year in question and, in some cases, for the entire benefit window.[2]
The common pitfalls are predictable. Treaty interaction with the home state can override the local regime where the home jurisdiction asserts primary taxing rights — most relevantly, United States citizens remain subject to US federal tax on worldwide income, with foreign-tax-credit relief but no escape from the higher of the two bills. Activities undertaken before registration is approved may also fall outside the regime entirely.[3]
| PPP basis · NYC = 100 | Cyprus | New York · NY | Δ |
|---|---|---|---|
Cost-of-living index Indicative · placeholder until COL table ships | 58.0 | 100.0 | -42.0 pts |
Nominal net (annual · $120k) From the engine — exact | $97,945 | $77,900 | +$20,045 |
| Real net · NYC basket | $168,870 | $77,900 | +$90,970 |
Every figure in this country reference traces to a primary instrument. We publish the model and welcome correction.
Read the full note ↗| Party | Rate | Cap |
|---|---|---|
| Employee / self-employed | 11.45% | none |
Healthcare financing on the resident side is normally embedded inside the social-security charge rather than carried as a separate payroll line. The Comparely engine models healthcare as part of the social contribution unless a country exposes a distinct line item — track additions in the schema for future surfacing.
| Instrument | Rate |
|---|---|
| Dedicated health levy | — |
| Long-term care levy | — |
| Embedded in social charge | included |
Cyprus Non-Dom (SDC exempt). Caps qualifying income at a flat 0%, replacing the default progressive schedule. Benefit runs for 17 years from first qualification.
Cyprus 50% Employment Exemption. Exempts 50% of qualifying income, with the remainder taxed under the default schedule. Benefit runs for 17 years from first qualification. Eligibility: 3+ years of prior non-residency and employment by a local entity.
| PIT rate · qualifying income | 0.00% |
| Duration | 17 yrs |
| Applies to employment | no |
| Applies to self-employment | no |
| 22.0% |
| Net take-home | $63,695 | $97,945 | $155,959 |
| Net · monthly equiv. | $5,308 | $8,162 | $12,997 |
Table 1 · Net take-home under the auto-picked regime, three income points, FY 2026 indicative. Highlighted column is the $120k worked example used elsewhere on the site. |
| Arrival (day 0) | Establish address; obtain tax ID |
| Day 0 – 90 | Visa application (if required) and bank account |
| Day 183 | Default residency threshold crossed |
| Year-end | Tax year closes |
| Year + 1 · Q1 | Special-regime registration window (if any) |
| Year + 1 · Q2–Q3 | First annual return |