Gibraltar income tax rates 2026/27

How income tax works in Gibraltar

Gibraltar has two ways of working out income tax, and every taxpayer is assessed under the one that costs them less:

• The Gross Income Based System (GIBS) taxes your gross income in bands, with almost no allowances. Most people earning above about £26,000 end up on it.
• The Allowance Based System (ABS) first takes off allowances (personal, children, mortgage, medical insurance and so on) and then taxes what's left at higher rates. It usually works out cheaper on lower incomes and for people with large allowance claims.

You can choose a system on your tax return, but the choice only affects how much is deducted from your pay during the year. When the Income Tax Office makes your final assessment, the law requires it to use whichever system gives the lower bill, and it refunds anything you overpaid.

Gross Income Based System rates 2026/27

There are two schedules. Which one applies depends on your total assessable income for the year. If it's over £25,000, all of it is taxed on the second schedule, starting again from the first pound.

The two schedules meet exactly: both give £4,240 of tax at £25,000, so earning one pound more doesn't cause a jump. The rates have not changed since 1 July 2024, and the 2026 Budget (7 July 2026) left them as they are.

Under GIBS you can only deduct a few things: mortgage interest up to £1,500 a year, a first-home purchase allowance up to £7,500, approved pension contributions up to £1,500 a year and approved medical insurance up to £3,000 a year. Both systems also give a tax credit of 10% of gym or personal-trainer fees and of private school fees paid in Gibraltar.

Allowance Based System rates and allowances

Under ABS, allowances come off your income first, and the rest is taxed like this:

You then get a tax credit of £300 or 2% of the tax, whichever is greater. The main allowances below are the latest the Income Tax Office has published (headed 2025/26). The 2026 Budget speech mentioned higher allowances, but no new amounts had been published when we checked.

Social insurance 2026/27

Social insurance is Gibraltar's equivalent of National Insurance. Your employer deducts it from your pay along with income tax. The big difference from the UK is the cap: once you earn more than about £408 a week (around £21,200 a year), you pay the same maximum whatever your salary.

These rates apply from 1 July 2026 and are the same as 2025/26. Employees aged 60 or over don't pay employee contributions (the employer still does), and full-time students are exempt.

What you take home: Gibraltar against the UK

The table uses the rules above for a single employee with no other claims, under whichever Gibraltar system is cheaper, against 2026/27 UK income tax and employee National Insurance (England, Wales and Northern Ireland rates).

Gibraltar isn't cheaper for everyone. A single person on a typical salary keeps a little less than in the UK, for two reasons:

• The UK doesn't tax the first £12,570.
• Gibraltar's Gross Income Based System taxes everything from the first pound once you earn over £25,000.

Somewhere around £68,000 that reverses. From there Gibraltar pulls ahead fast, because social insurance stops at about £2,121 a year and the top rate drops back to 25% above £105,000. Children, a mortgage or medical insurance can make the Allowance Based System cheaper and narrow the gap at lower salaries. Try your own numbers in the Gibraltar tax calculator.

Income tax is only part of the picture. Gibraltar has no VAT on services, no capital gains tax, no inheritance tax and no tax on savings interest. Since 15 July 2026, though, most goods carry a 15% Transaction Tax. We explain all of it in Is Gibraltar tax free?

How you pay: PAYE, tax codes and tax returns

1. Register when you start. Email a copy of your terms of engagement (your contract) and your ID to paye.registration@gibraltar.gov.gi. If you've worked in Gibraltar before, add Part 1 of your P7A.
2. Get your tax code. The Income Tax Office issues a code and a certificate for your employer. Until it does, your employer has to deduct a flat 20%, so register straight away.
3. Tax comes off every pay packet. Your employer pays your tax and social insurance to the Income Tax Office by the 15th of the following month.
4. Get your P7. After 30 June each year your employer gives you a P7 showing your pay, tax and social insurance for the year.
5. File your tax return by 30 November. The IT1 return covers the year that ended on 30 June and sets the allowances in your next tax code. You can file online through eGov (restored in October 2026 after an outage) or email the PDF form to paye.returns@gibraltar.gov.gi. Our guide to filing your 2025/26 tax return covers who must file, what to attach and the late penalties.
6. Leaving Gibraltar? Send the Claim for Final Assessment form and Part 1 of your P7A to paye.leavinggib@gibraltar.gov.gi.

Who counts as a Gibraltar taxpayer

You're ordinarily resident in Gibraltar for tax if you're here for at least 183 days in a tax year, or more than 300 days across three consecutive years. Employment income earned in Gibraltar is taxed here whether or not you live here. Tax residence is separate from the right to live here: for residence permits, see our Gibraltar residency guide.

Moving from Spain? Under the 2019 tax agreement between Spain and the UK on Gibraltar, Spanish nationals who moved from Spain to Gibraltar on or after 4 March 2019 remain tax resident in Spain. Other nationalities moving from Spain can also stay Spanish tax residents for a period. If you live in Spain and cross to work, Spain will normally treat you as its tax resident too, so talk to a Spanish asesor fiscal before you compare offers. Our frontier workers guide covers the rest of cross-border life.

High earners: Category 2 and HEPSS

Two special regimes cap the tax of very high earners:

• Category 2 taxes residents only on their first £118,000 of income: at current rates, at least £37,000 and at most £42,380 a year. Since June 2026, new applicants need £5 million of net wealth (it was £2 million) and pay a £5,000 application fee.
• HEPSS (High Executive Possessing Specialist Skills) caps the assessable income of qualifying employees earning over £160,000 at £160,000, for an annual tax bill of £39,940.

Both need an application to the Income Tax Office's qualifying individuals section (taxqi@gibraltar.gov.gi).

Contacting the Income Tax Office

• Address: St Jago's Stone Block, 331 Main Street, Gibraltar GX11 1AA
• Phone: +350 200 71071 (PAYE, extension 1; social insurance, extension 8)
• Email: paye.enquiries@gibraltar.gov.gi for general questions, sicontributions@gibraltar.gov.gi for social insurance
• Online services and payments: portal.egov.gi and tax.egov.gi