15February2017

New Amendment Supporting The Employer SSI Premium And Tax Payments Has Been Released

The Decree-law No. 687 on the Adoption of Certain Regulations under the State of Emergency came in force upon its publication in the 29974 numbered Official Gazette, issued on 02/09/2017.

The following regulations have been introduced by the Decree-law.

Social Security Insurance Premium Support

Pursuant to Provisional Article 17, added to the Unemployment Insurance Code No. 4447, the amount that is equal to 22.22 TL times the monthly premium payment days of the insured employee for the period until 12/31/2017 shall be set off against all premiums payable for each employee, who is hired between 02/01/2017 and 12/31/2017 on the condition that the following criteria shall have been met so that a support (subsidy) payment shall be made to the employer out from the Unemployment Fund.

Criteria that shall be met for the hired employee to be eligible for the said support:

The employee shall be recruited / hired between 02/01/2017 and 12/31/2017;
The employee shall have an unemployment record at ISKUR records;
The employee shall not have worked in any other business as an insured for 3 (three) months prior to his recruitment;
The employee shall be added to the number of the insured employee count; reported in December 2016.

Criteria that shall be met for the employer to be eligible for the said support:

Submission of monthly premium and service statement within the legal term,
Payment of insurance premiums within the legal term,
No illegal or informal employment,
No overdue premiums or outstanding administrative fines from the past (Rescheduled debts are excluded)

Employers who make use of this support shall not be eligible for any other insurance premium subsidy, support or discount/rebate applicable to the same employee for the same period.

Income Tax Withholding Support

In connection with the income tax that is calculated over such portion of the monthly gross amount of the minimum wage corresponding to the number of actually worked premium payment days for an employee, who shall be eligible for the above-mentioned Social Security Insurance Premium Support by means of Provisional Article 18 added to the Unemployment Insurance Law No. 4447, such balance of the income tax after the application of the minimum survival allowance (MSA) shall be deducted from the tax that appears on the withholding tax return and this support shall be applicable until 12/31/2017.

Those who are eligible for the income tax withholding subsidy under this Article may not be eligible for any other similar income tax withholding subsidies defined in other Laws.

Of the stamp duty payable for the papers issued for wage payments made under this Article, such portion of it that corresponds to the number of premium payment days of the monthly gross minimum wage shall not be filed as a return, and shall not be paid.

Said supports and subsidies shall not be applicable to employees in public businesses and agencies and who are subject to the SSI support premium as well as the insured abroad.

An illustrative calculation is given in the table below for an insured who is paid a gross wage of TL 2,500.00.

	Cap for the subsidy/ support	Realized	Amount payable
Gross	1.777,50	2.500,00
SSI Insurable Earning (daily earning taken as a basis for premiums and contributions) Basis	1.777,50	2.500,00
SSI Insurable Earning Basis (IEB)- Applied	1.777,50	2.500,00
SSI IEB Worker's Share Deduction (14%)	248,85	350,00	101,15
SSI IEB Unemployment Worker's Share Deduction (1%)	17,78	25,00	7,23
SSI IEB Employer Share Deduction (20.5%)	364,39	512,50	148,11
SSI IEB) Unemployment Employer's Share Deduction (2%)	35,55	50,00	14,45
Income Tax Basis (Net Amount)	1.510,88	2.125,00
Income Tax Deduction (Minimum Survival Allowance) (15%)	93,32	185,44	92,12
Cumulative Income Tax Basis	1.510,88	2.125,00
Total Income Tax Exclusion	0.00	0.00

Stamp Duty Basis	1.777,50	2.500,00
Stamp Duty Deduction (7.59%)	13,49	18,98	5,48

SSI Premium payable to the Social Security Institution (SSI): 270.95( 101.15 + 7.23 + 148.11 + 14.45 )
Tax payable to the Tax Office:97.60( 92.12 + 5.48 )

For the purposes of this calculation, the income tax bracket is assumed to be 15% and the employee works on all work days within one month.

Author CottGroup Hukuk ve Mevzuat Ekibi, Category Social Security Law and Legislation, Taxation Law

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