According to the Circular numbered 27998389-010.06.02.421208 published by the Ministry of Treasury and Finance with the subject 'Financial and Social Rights', the coefficients used to calculate the wage of a public officers have been revised effective 01.07.2021.

Income Tax Exempted Severance Pay

The following value has been calculated taking these coefficients into account and shall be applied for the period between the dates of 01.07.2021 - 31.12.2021, maximum severance pay to be exempted from income tax is determined as 8,284.51 TRY.

To access the full circular in which these announcements were made, please click here. (Please also be advised that the contents of this circular are in Turkish language.)

Should you have any queries or need further details, please contact your customer representative.

Social Security Institution has published a General Letter on 05.07.2021 to explain the details regarding the declaration of remote workdays.

The rules below are stated in the General Letter:

• A written agreement or contract would need to be done for the remote works. The remote work period and the working time would need to be included in this written contract.
• The working schedule can be either fully remote work or partially remote & partially in the workplace. The contracts can be hybrid.
• If an employee works fully remotely, the holidays, weekends, national holidays, annual leaves would need to be included on the remote workday declaration. If the employee works partially remotely and partially in the workplace under a hybrid contract, only actively remote workdays would need to be declared (except holidays).
• There is no difference in the Labor Law rights perspective between the employees work remotely and in the workplace.

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 the article 34/14 of Income Tax Law and these are only subject to social security.

Social Security Premium

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

In case of the death of an employee, there are some payment obligations of the employers due to Labor Law No. 1475, Article 14, and the Turkish Code of Obligations No. 6098.

In case of the employee's death, all salaries, benefits in kind, and private life insurance guarantees would need to be paid to the employee's legal heir.

In addition, the following payments would also be applicable in case of the death of an employee:

1. Severance Payment

Per the 14^th Article of Labor Law No. 1475, in case of the termination of an employment contract upon the employee's death, the severance payment equal to a 30-day salary should be paid to the employee for each full year that has passed during the period of the service/employment contract as of the starting date of the employment. For periods exceeding one year, the payment should also be made based on the same proportion.

Also, in case of the employee's death, the severance payment per the above statements should be paid to the legal heirs of the employee.

According to these statements, if the employee has completed 1 year, it is an obligation to pay severance pay to their legal heirs.