The statutory deductions applicable in a standard Turkish payroll are social security premium, income tax, and stamp tax. Also, the salaries generated from liaison offices in Türkiye are exempt from income tax per Article 23/14 of Income Tax Law, and these are only subject to social security.

Also, as of 2022, an income tax exemption amount up to the tax amount calculated over minimum wage would be applicable for all wages.

Social Security Premium

Social Security Premium is calculated over wages monthly and paid jointly by the employee and the employer. The contribution rates are as follows:

A new regulation with regards to the employee withdrawals from the automatic private pension plans made by the employers has been published in Official Gazette numbered 31704 and dated 29.12.2021

With that new regulation, the employees who withdraw from the automatic private pension plan, would not need to be re-enrolled again after 3 years. The aforementioned rule has been abolished.

With Law No. 7346 published in the Official Gazette numbered 31700 and dated 25.12.2021, new regulations have come into force for the R&D and technology development employees.

With that new regulation, the income tax exemption can be applicable up to the limit of 20% of the total population or 20% of the total time subject to the incentive for the time performed outside of R&D and technology development regions. The President can increase the rate to 75% per the regional or sectoral developments.

Radical amendments have been made in the Turkish tax system with Income Tax Law (Law no: 7349) published in the Official Gazette numbered 31700 and dated 25.12.2021.

The details of these amendments are as below:

Income Tax Exemption for All Wages

With the new regulation, an income tax exemption would be applied for all wages.

This income tax exemption will be applied as below:

1. Minimum wage income tax exemption is applied on monthly basis.
2. The income tax exemption amount would be the income tax amount calculated over the minimum wage.
3. If the total gross wage of an employee is higher than the monthly gross minimum wage, income tax would be applicable on the total gross wage amount.
4. In that case, the income tax brackets and rates would be determined based on the cumulative income tax base amount, including the exempt part mentioned above.
5. The payable income tax amount would need to be calculated by deducting the income tax amount calculated over the minimum wage in the related month from the total income tax amount calculated over the total gross wage considering the cumulative income tax base.
6. That deduction/exemption amount cannot be higher than the monthly income tax amount calculated over the monthly minimum wage.
7. If employees receives wages from more than one employer, the income tax exemption would only be applicable on the higher wage amount.