Application Of Administrative Fines Reduction In The Late Submission Of New Hire And Termination Declaration

Regarding to Article 102 of Law No. 5510, if the new hire declaration of the insurance holder subject to sub-clause (a) of the first paragraph of Article 4 of Law No. 5510 are not submitted within the legal period, an administrative fine shall be applied at the rate of one minimum wage per insurance holder.

In the event that the new hire declaration is given automatically within 30 days after the expiry of the legal period, and the aforementioned penalty is paid within 15 days from the date of the declaration to be made by the concerned parties, the penalty is applied over the amount corresponding to one fourth.

The circular called "Declaration with regard to non-working days entry" numbered 2013-19 has been published on 6 April 2013 by Social Security Institution. Please find below the Social Security Institution's announcement regarding to regulation of employees' recovery reports:

1-Be effective as of 02.03.2013; if employees' recovery reason is shown as 01- Recovery in Monthly Premium and Service Document, this declaration will replace the declaration of non- working days during the recovery period. On the other hand, if the recovery reports are recorded on the old-system, there won't be needed to an additional notification.

Changes in Absences Days Notification of SSI

For companies that have less than 30 employees, missing social security days must be notified to the authority using the related form EK-10 SGK Eksik Gün Bildirimi (Absences Days Notification  of the Social Security Institute) which must be submitted along with supporting documents (Such as unpaid leave forms, sickness reports, etc…). A new change announced in the official gazette on the 21st of August 2013 under the title ‘Sosyal Sigorta İşlemleri Yönetmeliğinde Değişiklik Yapılmasına Dair Yönetmelik’ (Amending the Regulation on Social Security Procedures) has reduced the number of employees for companies that this rule applies to from 30 to 10. According to this change, all companies with less than 10 employees must make monthly notifications to the authority using the related forms and documents mentioned above. Companies with 10 employees and above can provide information related to missing social security days by including it in the Aylık Prim ve Hizmet Bildirgesinde ( Monthly Declaration of Premium and Service).

Changes in Short Term Insurance Premiums

The short term insurance premium rate is determined by the SSI following registration with the Social Security Institute by taking into account the level of occupational accident and illness risks and applying a rate ranging from 1%-6.5%. Workplaces that have premiums based on the 1% pay a much lower employer premium amount than workplaces that are known to be more dangerous. In a publication of the official gazette on 19.01.2013, it was announced that as of 01.09.2013 the Premium rates will be fixed at 2% and will be independent of danger level. As of result of this change, workplaces that are currently paying premiums at a rate lower than 2% will be faced with an increase in their SSI contribution amount, while workplaces that are paying over 2% will see a decrease in their premium amounts. Organizations that are currently paying a 2% premium will not be affected by this changes. It is important to note that only the employer premium contribution amounts will be affected by this change.

The Cabinet of Minister have the authority to reduce the 2% fixed rate to 1.5% and also to increase it to 2.5%

The changes can be explained using the following example: The short term insurance employer contribution for an organization with a danger level resulting in the 1% rate and who has an employee who earns a monthly gross salary of 5000 TRY is 50 TRY. As of the 1st of September, this figure will be increase to 100 TRY.

As a result of the aforementioned changes and, the SSI sent out a notification stating that the e-declaration system will be out of service and inaccessible due to updates on the dates of August 30-31 2013.

PENSION AND HEALTH (MANDATORY)

SGK = Social Security in Türkiye

There is an e-declaration which is sent regularly at the end of following month, which is called “aylık hizmet bildirimi” in Turkish. As mentioned above, clients must provide the power of attorney regarding the password in case the payroll provider will communicate directly with this party. In case there is no edeclaration password a proxy letter is required instead. As mentioned above, the payment date is until the end of following month, and the local payroll provider will be able to pay the premiums on the client’s behalf, as explained above too. The total amount must be paid in local currency (TRL – Turkish Lira).

Bank payments are possible but the client must have a local bank account.

Liability for Social Security:

Social Security contributions are calculated on a monthly basis of monthly wages that are paid jointly by the employee and the employer. Please find below the rate percentages table;

**If the Social Security premium payments are made on time, the employer entitles to the discount.

The rates are applied to social security base which is comprised gross wages, bonuses, and other taxable payments. However there is a ceiling base which is 6360,90TL for the first half of 2013 and the first half of 2013 and 6639,90TL for the second half of 2013.