According to the Taxing Wages report published by Organization for Economic Co-Operation and Development (OECD), the tax wedge is a measure of the tax on labour income, which includes the tax paid by both the employee and the employer in Turkey.

Single worker

The tax wedge for the average single worker in Turkey decreased by 0.1 percentage points from 39.0 in 2017 to 38.9 in 2018. The OECD average tax wedge in 2018 was 36.1 (2017, 36.2). In 2018 Turkey had the 17th highest tax wedge among the 36 OECD member countries, compared with the 18th in 2017.

In Turkey, income tax and employer social security contributions combine to account for 67% of the total tax wedge, compared with 77% of the total OECD average tax wedge.

One-earner married couple with two children

The tax wedge for a worker with children may be lower than for a worker on the same income without children, since most OECD countries provide benefits to families with children through cash transfers and preferential tax provisions.

Turkey had the 8th highest tax wedge in the OECD for an average married worker with two children at 37.2% in 2018, which compares with the OECD average of 26.6%. The country occupied the 7th highest position in 2017.

Child related benefits and tax provisions tend to reduce the tax wedge for workers with children compared with the average single worker. In Turkey in 2018, this reduction (1.7 percentage points) was less than the OECD average (9.5 percentage points).

Tax wedge trends between 2000 and 2018

In Turkey, the tax wedge for the average single worker decreased by 1.5 percentage points from 40.4% to 38.9% between 2000 and 2018. During the same period, the average tax wedge across the OECD decreased by 1.3 percentage points from 37.4% to 36.1%.

Since 2009, the tax wedge for the average single worker increased by 2.2 percentage points in Turkey. During this same period, the tax wedge for the average single worker across the OECD increased by 0.6 percentage points.

Employee tax on labour income

The employee net average tax rate is a measure of the net tax on labour income paid directly by the employee.

In Turkey, the average single worker faced a net average tax rate of 28.2% in 2018, compared with the OECD average of 25.5%. In other words, in Turkey the take-home pay of an average single worker, after tax and benefits, was 71.8% of their gross wage, compared with the OECD average of 74.5%.

Taking into account child related benefits and tax provisions, the employee net average tax rate for an average married worker with two children in Turkey was reduced to 26.2% in 2018, which is the highest in the OECD, and compares with 14.2% for the OECD average. This means that an average married worker with two children in Turkey had a take-home pay, after tax and family benefits, of 73.8% of their gross wage compared to 85.8% for the OECD average.

Source: Organization for Economic Co-Operation and Development (OECD) / link: http://www.oecd.org/tax/tax-policy/taxing-wages-turkey.pdf
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Should we pay Social Security premiums, when we continue to pay the wage to the employee who is on maternity leave? If we pay as an advance and then deduct, is it possible not to pay the Social Security premium?

All payments in cash and other ways paid to the employee are subject to Social Security premium.

If the employer wants to pay wage to the worker on maternity leave, the employer must pay the premium of the wage payment and must check the box “Didn’t work” on the system.

Source: İSMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

We couldn’t open a bank account for the foreign employee. Work permit has been approved by the Ministry, Social Security Insurance has been made, but banks don’t open a salary account due to the fact that the employee didn’t enter and exit to/from country with his/her passport. Do we have to pay the salary through the bank?

If the number of employees exceeds 5, the wages, including of foreign workers, must be paid through a bank.

Source: İSMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

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About cutting back on the worker’s wage due to loss.

QUESTION
…
There are construction contract works we do as a subcontractor.
We employ a lot of workers in sites.
There are a lot of entrances to and exits from the site.
There are workers we employ in these sites according to score method.
We make a lot of expenses when emloying these workers, such as medical examination, uniform etc.
These people don’t come to work 1-2 days after the start date of employment.
The expenses we make for these people return to us as losses.
We want to cut back on that person’s wage for the expenses we make.
How should we proceed in order to not have any difficulties in terms of both the personnel and SSI (Social Security Institution)
…
(13.11.2018 15:19)

ANSWER
There can be deductions from the equipment, uniforms etc. that are given to the worker only for the losses.

Source: Ismmmo
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Minister Zehra Zümrü Selçuk made a press release, following the meeting.

She announced that the minimum wage is increased to two thousand 20 Turkish Liras.

The net minimum wage was a thousand and 603 Turkish Liras last year.

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Minimum Wage Determination Commission has come to decision at its 4th Meeting.

The wage is increased 26,05%, adding TRY 417.

The new amount is TRY 2.020.

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Is shipman not working on his off day, got paid?
Shipman, not working on his off day will be paid as much as a day wage.

How much higher is Shipmen working on weekend holiday, got paid?
Shipmen, working on the weekend holiday, will be paid as %25 raised pay additional to his regular wage.

Source: Maritime Code
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

1- What is wage?
According to the labor Law no. 4857 article no. 32, wage is defined as follows.

Wage: It is a payment made by the employer or by the third person  to the employee in return for labor.

2- How is it paid?
Payments are made;
–via Turkish Banks to the Turkish bank accounts or,
– if it is decided to be made as currency, it is paid in accordance with daily exchange rate.

3- Which cannot be considered as wage?
–Payment cannot be made by promissory note or bond
– by coupon
– by bill claimed to represent the money in country
–and by any other way.

4- When it needs to be made?
–It has to be made within a month.
– It can be reduced to a week according to the labor contract or collective labor agreement.

5- When labor contract terminates, which payments need to be made to the employee?
If labor contract terminates
– Employer’s wage,
–Rights stemmed from labor contract,
– Rights stemmed from law has to be paid unconditionally.

6- How much is the time-out in payments?
Time –out is the five years in payments.

Source: Labor Law 4857
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Minimum Wage to be implemented in 2018
Gross Salary     : 2.029,50 Turkish Lira
Base Salary       : 1.603,12 Turkish Lira (152, 21 Turkish Lira Subsistence Allowance Included)

2- Will Minimum Wage in 2018 rise in July?
No.
Minimum wage will be implemented all through the year.
Minimum wage won’t be changed in 2018, July, different than in 2015 and prior to that year.

3- What were the minimum wages of 2016 and 2017?
3.2- Gross salary in 2017 was implemented as 1.777,50 Turkish Lira.
Gross Salary    : 1.777,50 Turkish Lira
Base Salary     : 1.404,06 Turkish Lira (133, 31 Turkish Lira Subsistence Allowance included.) 

3.1- Gross Salary in 2016 was implemented as 1.637, 50 Turkish Lira.
Gross Salary     : 1.637,50 Turkish Lira
Base Salary      : 1.300,99 Turkish Lira (123, 53 Turkish Lira Subsistence Allowance included)

4- How much minimum wage increased in 2018?
Minimum wage in 2017 with the base salary of 1.404,06 Turkish Lira increased to 1.603,12 Turkish Lira with the %15,27 percent rise. Minimum wage rise became 199, 06 Turkish Lira.

5- What was the employer’s cost of minimum wage in 2018?
5.1- In 2018, salary deduction of the employer and the worker was total 781, 54 Turkish Lira. (With the five point of social insurance institution deduction

(In 2017, salary deduction of the employer and the worker was total 684, 50 Turkish Lira)

***MINIMUM SALARY COST IS 781,54 TURKISH LIRA
Meaning, 781, 54 Turkish Lira of Social Insurance Institution and tax will be paid with minimum salary of 1.603,12 Turkish Lira. Minimum wage payment and the other costs will be amount to 2.384,66 Turkish Lira.

 *** MINIMUM SALARY with its cost is 2.384,66 Turkish Lira
Regarding that wage agreements in Turkey is mostly based on the base salary, minimum wage payment, Social Security Institution and tax amount will be 2.384,66 Turkish Lira which can be considered the total cost of the employer.

Regarding that the employer will benefit from five point of Social Insurance Institution Premium, Cost detail will be like on the below list.
5.2- Minimum Wage Cost Allocation in 2018 is indicated in the below list.  

2018-Wage Deduction =  426,38 Turkish Lira
Social Security Institution        : 284,13 Turkish Lira
Unemployment Insurance        : 20,30 Turkish Lira
İncome Tax                             : 106,55 Turkish Lira
Stamp Tax                               : 15,40 Turkish Lira
2018-Employer’s Cost  =  355,16 Turkish Lira
Social Security Institution         : 314,57 Turkish Lira
Unemployment Insurance          : 40,59 Turkish Lira
2018-TOTAL COST = 781, 54 Turkish Lira
 

5.3- What was the cost of minimum wage in 2017?
2017-Wage Deduction  =  373,44 Turkish Lira
Social Security Institution :   248,85 Turkish Lira
Unemployment Insurance :    17,78 Turkish Lira
Income Tax                     :       93,32 Turkish Lira
Stamp Tax                      :       13,49 Turkish Lira
7-Employer’s Cost                 =  311,06 Turkish Lira
Social Security Insurance             :   275,51 Turkish Lira
Unemployment Insurance             :     35,55 Turkish Lira
2017-TOTAL COST                     =  684,50 Turkish Lira

6-  If the employer is in debt to the  Social Security Institution and he/ she did not make an installment plan, the cost would be 882,79 Turkish Lira.
If the employer has an overdue debt to the Social Security Institution  and he/she did not make an installment plan, the cost would be  883,02 Turkish Lira.

7-How much is the minimum wage in the Countries of the Organization for Economic Co-operation and Development?
Presented in the table below, annual minimum wages of some countries, members of the organization for Economic Co-operation and Development, are given detail.

According to the Organization for Economic Co-operation and Development figures, Turkey is on the 17th line of the list.

Critical Note:  Above mentioned minimum wage salary of 2018 is calculated in accordance with the explanations of Ministry of Labor and Social Security. If Ministry of Labor and Social Security has an official announcement, calculations table will be updated. Calculations were edited only for general information. Responsibility cannot be accepted on the occasion of the usage of table and calculations by the followers.

– If the court or the arbitrator concludes that the termination is unjustified because no valid reason has been given or the alleged reason is invalid, the employer must re-engage the employee in work within one month. If, upon the application of the employee, the employer does not re-engage him in work, compensation to be not less than the employee’s four months’ wages and not more than his eight months’ wages shall be paid to him by the employer.
– In its verdict ruling the termination invalid, the court shall also designate the amount of compensation to be paid to the employee in case he is not re-engaged in work.
– The employee shall be paid up to four months’ total of his wages and other entitlements for the time he is not re-engaged in work until the finalization of the court’s verdict. If advance notice pay or severance pay has already been paid to the reinstated employee, it shall be deducted from the compensation computed relevantly. If term of notice has not been given nor advance notice pay paid, the wages corresponding to term of notice shall also be paid to the employee not re-engaged in work.
– For re-engagement in work, the employee must make an application to the employer within ten working days of the date on which the finalized court verdict was communicated to him. If the employee does not apply within the said period of time, termination shall be deemed valid, in which case the employer shall be held liable only for the legal consequences of that termination.

Source: Article 21 of the Labor Law no. 4857

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.