Cyprus Pension Guide 2026

State Pension (Social Insurance Pension)

The Cyprus state pension is a contributory, earnings-related system funded by Social Insurance contributions (8.3% employee + 8.3% employer). Key features:

• Retirement age: 65 for full pension; reduced pension available from age 63
• Minimum contributions: At least 1,560 weeks of insured employment for full pension
• Pension calculation: Based on insurable earnings over the best 25 years of contributions
• Maximum pensionable earnings: EUR 5,556 per month (the SI cap)
• Pension supplement: Cost-of-living adjustments are made periodically

GHS (GesY) for Pensioners

Pensioners in Cyprus are entitled to full healthcare coverage under the General Healthcare System (GHS/GesY). Pensioners contribute:

• 2.65% of their pension income (no cap)
• Contributions are deducted at source by the Social Insurance Services before pension payment
• Coverage includes primary care, specialist care, hospitalisation, diagnostics, pharmaceuticals, and dental care

Taxation of Pension Income

Pension income in Cyprus is taxed under the progressive PAYE rates (0–35%) with the EUR 19,500 tax-free threshold. Key points:

• State pension and private pension income are both subject to income tax
• The EUR 19,500 threshold applies to total income including pensions
• Lump-sum pension withdrawals may be subject to different treatment depending on the plan
• Non-dom residents pay tax on Cyprus-source pension income only
• Foreign pensions received by Cyprus residents may be taxable depending on the relevant DTT

Private Pension Plans

• Group life insurance and provident funds: Common employer-provided retirement benefits
• Individual pension plans: Available through insurance companies and banks
• International pension transfers: Pension funds from the UK (QROPS), EU, and other countries can be transferred to Cyprus-based pension schemes
• Contributions to approved pension plans are tax-deductible within limits