Minimum Wage Exemption: As of 2022, no income or stamp tax is withheld on the minimum wage. This exemption applies to the highest wage earned by an employee from multiple employers. Net and Gross Salary: In employment contracts, salaries can be specified as net or gross. Net salary is the amount that the employee actually receives, while gross salary is the amount before taxes and premiums are deducted. Tax Calculation:
- Conversion from Net to Gross Salary: The net salary, which is specified, is converted to gross salary for tax and premium calculations.
- Income Tax: Income tax is calculated on the remaining amount after deducting social security and unemployment insurance premiums from the gross salary. The minimum wage exemption is subtracted from this amount.
- Stamp Tax: Stamp tax is calculated on the remaining amount after deducting the minimum wage from the gross salary.
- Deductions: Net salary is determined by deducting social security, unemployment insurance, income, and stamp taxes from the gross salary. In conclusion, even when companies pay net salaries to their employees, they must first determine the gross salary for tax calculations and make the required legal deductions from this gross salary. Special situations such as the minimum wage exemption should also be considered during this process.
Source: Revenue Administration
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