Regulation Regarding the SSI Premium Exemption of the Electricity, Natural Gas and Heating Allowance

With the Circular dated December 14, 2022 and numbered 2022/26 published by the Social Security Institution, the procedures and principles regarding the social security premium exemption for the electricity, natural gas and similar heating allowances have been announced.

According to the relevant Circular, to be able to benefit from this exemption, these allowances;

• Should be done for electricity, natural gas, and other heating
• Should be made from December 9, 2022 to June 30, 2023 (including this date),
• Should be made in addition to the current social security premium base,
• Should not exceed 1,000 TRY per month.

1- Payments for Electricity, Natural Gas and Other Heating Purposes

To be able to benefit from this exemption, the related allowances must be done for electricity, natural gas, and other heating purposes. Accordingly, the relevant exemption will not be applied to payments other than these.

Example 1:

If a payment is made by the employer for the water bill to the employee, this exemption will not be applied.

These allowances can be made as cash payment to the employees or as a benefit in kind. In both methods, this exemption can be applied.

Example 2:

If the employer makes a 500 TRY to the natural gas card or pays the 350 TRY electricity bill for the employee, these payments will be exempted from social security.

The total amount of the electricity, natural gas and other heating allowances will be considered under the exemption as the energy allowance. Also, the benefit in kinds is totally exempt from social security premium per the Law No. 5510.

Example 3:

If the employer pays 450 TRY electricity allowance and 1,100 TRY natural gas allowance to the employee, the total benefit will be 1,550 TRY and the exceed amount of 550 TRY will be subject to SSI.

2- Exemption Periods of Electricity, Natural Gas and Other Heating Allowances

To be able to benefit from the exemption, the energy allowance should be made between November 9, 2022, and June 30, 2023 (including this date).

Example 4:

If the employer pays 500 TRY electricity allowance in September 2022, 450 TRY natural gas allowance in December 2022, and 300 TRY in July 2023 under the name of other heating allowance, the payments in September 2022 and July 2023 would not be exempt and, the payment in December 2022 would be exempted from social security premium provided that the other conditions in the circular are met.

Example 5:

The employer has made 450 TRY electricity allowance related to Dec 2022 and 700 TRY natural gas allowance related to Jan 2023 in August 2023. Although the relevant payments are related to the months/periods specified in Provisional Article 1 of Law No. 7420, it will not be possible to benefit from the exemption since the payments have been made in August 2023.

Example 6:

The employer has made 450 TRY electricity allowance for January 2023 and 900 TRY natural gas allowance for March 2023 to the employee in March 2023. As the relevant payments are made within the periods specified in Provisional Article 1 of Law No. 7420, provided that other conditions are also met;

Total Amount of Energy Allowance: 450 + 900 = 1,350 TRY

1,350 TRY - 1,000 TRY (Exemption Amount) = 350 TRY will be included in the social security premium base for March 2023.

3- Making the Payments in Addition to the Current Social Security Base Amount

To be able to benefit from this exemption, the allowances should be made in addition to the current social security base amount. As of the effective date of Provisional Article 1 of Law No. 7420, the last month/period declared from the workplace that will be checked to determine if this energy allowance is an additional item.

Example 7:

As of the effective date of Provisional Article 1 of Law No. 7420 (November 9, 2022), to determine the current social security base of the employee, October 2022 period declaration will be checked.

If this employee receives an energy allowance from the workplace in March 2023, the declaration made from the workplace in February 2023 will be checked.

Example 8:

If the employee in Example 7 has 0 days - 0 SSI base, January 2023 declaration will be checked.

Example 9:

For the employee who started to work at the workplace in November 2022, the declaration in November 2022 will be checked for the exemption condition. If the employee (B) continues to work at the same workplace in January 2023, the declaration in December 2022 from the relevant workplace will be checked.

If the employee works at more than one workplace belonging to the same or a different employer, the social security basis will be checked separately for each workplace belonging to the employer.

4- Payments made in Addition to the Current Social Security Base Should Not Exceed 1,000 TL per Month

Payments in addition to their current social security basis for electricity, natural gas and other heating purposes should not exceed 1,000 TL per month. If the relevant additional payments exceed 1,000 TL, the portion up to 1,000 TL will be exempt, and the portion exceeding this amount will be subject to social security.

Example 10:

If energy allowance is of 1,500 TRY,

Exempt Part: 1,000 TRY

The Part to be Subject to Premium: 1,500 TRY - 1,000 TRY = 500 TRY.

Example 11:

An energy allowance of 1,000 TRY has been made to the employee, who has been working at the workplace as of July 2022 and has a gross wage of 9,000 TRY.

If the employee continues to work until June 30, 2023, 1,000 TRY paid before will be excluded from the social security premium.

Other Statements

• If an incorrect declaration is determined, there will be a penalty and interest per the Article 89 of Law No. 5510.
• This energy allowance should not be included in the gross minimum wage.

You can reach the related Circular via the link. (In Turkish)

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