How are personal income taxes calculated in Gibraltar?
Short answer
Gibraltar runs two systems side by side, the Allowances Based System and the Gross Income Based System, and you are assessed under whichever produces the lower tax. Employees pay through PAYE, the tax year runs from 1 July to 30 June, and rates and bands are set in each annual Budget.
Detailed answer
What is taxed Income tax is charged on income accruing in or derived from Gibraltar. Individuals who are ordinarily resident, meaning present for at least 183 days in a tax year or more than 300 days over three consecutive tax years, are also taxed on certain income arising outside Gibraltar. The two systems Under the Allowances Based System, you deduct personal allowances from income and pay tax on the balance. For 2025/26 the rates were 14% on the first £4,000, 17% on the next £12,000 and 39% on the balance, with people whose taxable income did not exceed £11,450 exempt. Under the Gross Income Based System, you pay tax on gross income at lower rates with limited deductions. For 2025/26, on income above £25,000 and up to £100,000, the bands were 16% on the first £17,000, 19% on the next £8,000, 25% on the next £15,000 and 28% on the next £65,000. Separate lower bands applied to income up to £25,000. Worked example On £50,000 of gross income under the 2025/26 Gross Income Based System bands, tax before deductions comes to about £10,790, an average rate of around 22%. Check the current year Rates and bands can change in each Budget, so confirm the figures for 2026/27 with the Income Tax Office tax tables.