2022 II. Period Statutory Deductions on Payroll
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.
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 are calculated over wages monthly and are paid jointly by the employee and the employer. The contribution rates are as follows:
| Employee | Employer | |
|---|---|---|
| SSI Premium | %14 | %20,5 |
| SSI Unemployment Premium | %1 | %2 |
| Total | %15 | %22,5 |
| Discount** | %5 | |
| Total Discount Included | %15 | %17,5 |
**Timely payment of social security premiums by the employer is a pre-condition for applying the employer discount (Incentive No. 5510.)
The rates above are applied to the social security base consisting of gross wages, bonuses, and other payments subject to social security premiums.
However, if the social security base is higher than the social security premium ceiling, which is renewed every year, the social security premium ceiling amount valid for that period is considered to calculate the premiums.
As of July 1st, 2022, the social security ceiling amount is 48,532.50 TRY. This ceiling amount is updated annually according to the changes in the minimum wage (7.5 times the minimum wage.)
SSI Base and Ceiling
| SSI | Monthly SSI Base | Monthly SSI Base Ceiling |
|---|---|---|
| 2022 | 6,471.00-TRY | 48,532.50-TRY |
2022 Liability for Income Tax
Per the Income Tax Law, Article 1, the tax year is the calendar year in Türkiye and there is a cumulative income tax system that follows the calendar year. The tax rate that is applicable is determined based on the year-to-date cumulative income tax base of the employee. Therefore, the tax rate of the employees will increase throughout the year as their cumulative income tax base increases.
Below are the income tax brackets that are applicable for the salary income on 2022 tax year (Income Tax Communique No. 317):
| Minimum | Maximum | % |
|---|---|---|
| 0 | 32,000.00 | 15% |
| 32,000.01 | 70,000.00 | 20% |
| 70,000.01 | 250,000.00 | 27% |
| 250,000.01 | 880,000.00 | 35% |
| 880,000.01 ve more | 40% |
2022 II. Period Income Tax Exemption
With the Income Tax Law no: 7349 published on the Official Gazette dated 25.12.2021 and numbered 31700, an income tax exemption has come into force. The exemption amount is the income tax amount calculated over the applicable minimum wage.
Liability for Stamp Tax
The stamp tax is applied on employment income through the payroll. The applied rate is 0,759 percent as of 01.01.2015.
Stamp tax base is equal to the total gross earning on the payroll and the stamp tax is calculated over that total gross earning.
Also, with the Law no: 7349, a stamp tax exemption amount applicable as of 2022, has come into force. The stamp tax exemption amount would be the gross minimum wage of the current year.
2022 II. Period Minimum Wage Tax Exemptions
| Period | Income Tax Exemption | Stamp Tax Exemption |
| January | 638.01 | 37.98 |
| February | 638.01 | 37.98 |
| March | 638.01 | 37.98 |
| April | 638.01 | 37.98 |
| May | 638.01 | 37.98 |
| June | 638.01 | 37.98 |
| July | 825.05 | 49.11 |
| August | 1,051.11 | 49.11 |
| September | 1,100.07 | 49.11 |
| October | 1,100.07 | 49.11 |
| November | 1,100.07 | 49.11 |
| December | 1,100.07 | 49.11 |
Minimum Wage Sample Calculation as of July 1st, 2022.
| Gross Minimum Wage | 6,471.00 |
| SSI Employee (%14) | 905.94 |
| Unemployment Employee (%1) | 64.71 |
| Total Deduction | 970.65 |
| Net Minimum Wage | 5,500.35 |
Minimum Wage Employer Cost Calculation Sample as of July 1st, 2022.
| Gross Minimum Wage | 6,471.00 |
| SSI Employer (%20.5) | 1,326.56 |
| Unemployment Employer (%2) | 129.42 |
| Employer Cost (without discount of 5%) | 7,926.98 |
| Employer Cost (with a discount of 5%) | 7,603.43 |
2022 Sample Calculation as of July 1st, 2022 - 2
| Monthly Gross Salary | 12,500.00 |
| SSI Employee (%14) | 1,750.00 |
| Unemployment Employee (%1) | 125.00 |
| Total SSI Deduction | 1,875.00 |
| Income Tax Base | 10,625.00 |
| Income Tax Amount (%15) | 1,593.75 |
| Income Tax Exemption | 825.05 |
| Income Tax Payable | 768.70 |
| Stamp Tax Base (Before Exemption) | 12,500.00 |
| Stamp Tax Base Exemption | 6,471.00 |
| Stamp Tax Base (After Exemption) | 6,029.00 |
| Stamp Tax Payable | 45.76 |
| Total Deduction Amount | 2,689.46 |
| NET WAGE | 9,810.54 |
Payroll Calculation Method Sample
You can find below a sample calculation process from gross salary to net salary:
- Total gross earning: Gross base salary + all benefits and allowances
- Gross base salary: Monthly base salary / 30 * working days of the employee
- SSI base: Total gross payment - exemptions (i.e. inkind meal allowance)
- SSI employee contribution: Social security base * 0.14
- SSI employee unemployment contribution: Social security base * 0.01
- SSI employer contribution: Social security base * 0.205
- SSI employer unemployment contribution: social security base * 0.02
- Cumulative income tax base: Current income tax base + cumulative income tax base from the previous months
- Income tax base: Total gross payment - SSI employee contribution - SSI employee unemployment contribution
- Income tax: income tax base * tax rate
- Income tax exemption: The tax amount calculated over the applicable minimum wage
- Stamp tax base: Total gross payment
- Stamp tax base exemption: Monthly gross minimum wage amount.
- Stamp tax: Stamp tax base * 0.00759
- Total employee deduction: SSI total employee contribution + income tax + stamp tax
- Net payment: Total gross payment - total employee deduction
The tax rate of the employees will increase throughout the year as their cumulative income tax base increase. As the cumulative income base of the employee change, the tax bracket of the employee changes as well. The income tax bracket for January can be 15%, and in February, the tax bracket would be increased and can be 20% due to an extra bonus payment.
You can reach the official announcement of the minimum wage amount applicable as of July 1st, 2022 via the link (in Turkish).
You can click the link for the Law no: 7349.
You can reach Income Tax Communique No 317 via the link (in Turkish).
You can reach Stamp Tax Communique No 66 via the link (in Turkish).
You can reach Stamp Tax Table via the link (in Turkish).
Should you have any queries or need further details, please contact your customer representative.
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