Most developers and founders who relocate to Cyprus focus on income tax and corporate rates. The healthcare contribution gets less attention, but it affects every Cyprus tax resident on every type of income they receive.
Here is the practical guide to how GHS (the General Healthcare System, also called GESY) works, what you pay, and how it interacts with the Cyprus Non-Dom status that most relocating founders apply for.
What GHS Is and What It Covers
GESY is Cyprus' universal public healthcare system. It launched in 2019 and has since become the primary healthcare provider for residents. For expats, it replaces the need for private health insurance in most day-to-day scenarios.
Coverage includes:
- GP visits with small fixed co-payments
- Specialist referrals (through your personal GP)
- Diagnostic tests and imaging
- Hospital care and surgeries
- Prescription medications at reduced cost
Once you become a Cyprus tax resident, enrollment is mandatory. You register on the HIO portal (hio.org.cy), choose a personal GP from the list of registered doctors, and your contributions start from the income you declare.
GHS Contribution Rates by Income Type (2026)
| Income type | Rate | Payer |
|---|---|---|
| Employee salary | 2.65% | Employee |
| Employer payroll | 2.90% | Employer |
| Self-employed income | 4.00% | Self (covers both shares) |
| Dividends and interest | 2.65% | Individual |
| Rental income | 2.65% | Individual |
| Pension income | 2.65% | Individual |
The rates have been stable since the 2019 system launch and are confirmed unchanged for 2026.
The Annual Cap That Changes the Calculation
GHS contributions are capped at a base of EUR 180,000 per year. The math:
- Dividends/salary: 2.65% x EUR 180,000 = EUR 4,770 maximum
- Self-employed: 4.00% x EUR 180,000 = EUR 7,200 maximum
Once your income for a given category reaches EUR 180,000, GHS stops accumulating for that income stream. A founder taking EUR 300,000 in dividends from their Cyprus Ltd still pays a maximum of EUR 4,770 in GHS on those dividends, not EUR 7,950.
For most founders earning under EUR 180,000, the cap is not relevant. But at EUR 200,000 or above, the cap materially reduces what looks like a flat percentage.
Non-Dom Residents Still Pay GHS on Dividends
This is a frequent misunderstanding. Cyprus Non-Dom status exempts you from Special Defence Contribution (SDC) on dividends. It does not exempt you from GHS.
The result: Non-Dom residents pay exactly 2.65% on dividends, nothing more. SDC-domiciled residents pay 5% SDC plus 2.65% GHS, totalling 7.65%.
So when you see the 2.65% figure quoted for dividend tax in Cyprus, that is entirely the GHS contribution. The income tax on dividends under Non-Dom is genuinely 0%.
How the Cyprus GHS Fits Into a Typical Founder Structure
Consider a founder who set up a Cyprus Ltd, takes a modest salary, and distributes profits as dividends:
Salary of EUR 20,000:
- Employee GHS: 2.65% = EUR 530
- Employer GHS: 2.90% = EUR 580 (company pays this)
- Total salary GHS cost: EUR 1,110
Dividends of EUR 80,000 (from after-tax profits):
- GHS: 2.65% = EUR 2,120
Total GHS across both income streams: EUR 3,230 on EUR 100,000 in total income.
In return, that founder has access to the full GESY public healthcare network. Dental care is the main gap, as it is not included in the standard GESY coverage.
Establishing Residency: The Prerequisites
GHS only applies once you are a Cyprus tax resident. Qualifying for tax residency requires either 183 days of physical presence or meeting the 60-day tax residency rule, which allows EU citizens to qualify with 60 days per year under specific conditions.
After becoming tax resident, the first administrative step is obtaining the EU registration certificate. The Yellow Slip guide covers this process in full, including the documents required and which Migration office to visit. This document is what Social Insurance and the Tax Department use to confirm your residency status.
Practical Notes for Expat Founders
Opting out is not possible. There is no legal mechanism to opt out of GHS as a Cyprus tax resident. If you declare income in Cyprus, you contribute.
GHS for self-employed vs directors. If you operate as a self-employed individual (rather than through a company), you pay 4.00% on declared income. Directors of a Cyprus Ltd who take a salary pay the employee rate of 2.65%. The choice of structure affects GHS costs on top of social insurance.
Non-resident withholding on dividends is 0%. If your Cyprus company pays dividends to a non-resident shareholder, there is no GHS on that distribution. GHS applies only to Cyprus tax residents.
The Complete GHS Reference
For the full breakdown of rates by income type, the GESY calculator, and the interaction between GHS and Non-Dom status, the Cyprus GHS/GESY reference page has the current 2026 figures and a step-by-step contribution calculator.
At 2.65% on passive income with a EUR 4,770 cap, the GHS contribution is one of the lowest healthcare levies in the EU for investment and dividend income. For founders structuring salary and dividends through a Cyprus Ltd, it is a known, predictable cost rather than a variable one.
