Statutory Deductions on Payroll for 2023
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 Article 34/14 of Income Tax Law, and these are only subject to social security.
Also, the income tax exemption as much as the income tax deduction amount calculated over the minimum wage for all wages introduced in 2022 will continue in 2023 as well.
Social Security Premium
Social Security Premium is calculated over wages monthly and 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 - With the Discount | %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 January 1st, 2023, the social security ceiling amount is 75,060.00 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
| Period | Monthly SSI Base | Monthly SSI Base Ceiling |
|---|---|---|
| 2023 | 10,008.60-TRY | 75,060.00-TRY |
2023 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 applicable tax rate 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 2023 tax year (Income Tax Communique No. 323):
| Minimum | Maximum | % |
|---|---|---|
| 0 | 70,000.00 | 15% |
| 70,000.01 | 150,000.00 | 20% |
| 150,000.01 | 550,000.00 | 27% |
| 550,000.01 | 1,900,000.00 | 35% |
| 1,900,000.01 and more | 40% |
2023 Income Tax Exemption
The income tax exemption as much as the income tax deduction amount calculated over the minimum wage for all wages introduced in 2022 will continue in 2023 as well.
Liability for Stamp Tax
The stamp tax is applied on employment income through the payroll. The applied rate is 0,759 percent as of January 1, 2015.
The stamp tax base equals the total gross earning on the payroll, and the stamp tax is calculated over that total gross earning.
The stamp duty exemption for all wages brought in 2022 up to the minimum wage level will continue in 2023 as well.
2023 Minimum Wage Tax Exemptions
| Period | Income Tax Exemption | Stamp Tax Exemption |
| January | 1,276.02 | 75.96 |
| February | 1,276.02 | 75.96 |
| March | 1,276.02 | 75.96 |
| April | 1,276.02 | 75.96 |
| May | 1,276.02 | 75.96 |
| June | 1,276.02 | 75.96 |
| July | 1,276.02 | 75.96 |
| August | 1,276.02 | 75.96 |
| September | 1,604.08 | 75.96 |
| October | 1,701.36 | 75.96 |
| November | 1,701.36 | 75.96 |
| December | 1,701.36 | 75.96 |
2023 Minimum Wage Sample Calculation as of January 1st, 2023
| Gross Minimum Wage | 10,008.00 TRY |
| SSI Employee (%14) | 1,401.02 TRY |
| Unemployment Employee (%1) | 100.08 TRY |
| Total Deduction | 1,501.20 TRY |
| Net Minimum Wage | 8,506.80 TRY |
2022 Minimum Wage Employer Cost Calculation Sample as of January 1st, 2023
| Gross Minimum Wage | 10,008.00 TRY |
| SSI Employer (%20.5) | 2,051.64 TRY |
| Unemployment Employer (%2) | 200.16 TRY |
| Employer Cost (without discount of 5%) | 12,259.80 TRY |
| Employer Cost (with a discount of 5%) | 11,759.40 TRY |
Sample Calculation - 2 as of January 1st, 2023
| Monthly Gross Salary | 15,000.00 TRY |
| SSI Employee (%14) | 2,100.00 TRY |
| Unemployment Employee (%1) | 150.00 TRY |
| Total SSI Deduction | 2,250.00 TRY |
| Income Tax Base | 12,750.00 TRY |
| Income Tax Amount (%15) | 1,912.50 TRY |
| Income Tax Exemption | 1,276.02 TRY |
| Income Tax Payable | 636.48 TRY |
| Stamp Tax Base (Before Exemption) | 15,000.00 TRY |
| Stamp Tax Base Exemption | 10,008.00 TRY |
| Stamp Tax Base (After Exemption) | 4,992.00 TRY |
| Stamp Tax Payable | 37.89 TRY |
| Total Deduction Amount | 2,924.37 TRY |
| NET WAGE | 12,075.63 TRY |
2023 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., in-kind 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
- Income tax payable: Income tax – income tax exemption
- Stamp tax base (before exemption): total gross payment
- Stamp tax base exemption: Monthly gross minimum wage amount
- Stamp tax base (after exemption): Stamp tax base – stamp taxe base exemption
- 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 increases. 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 January 1st, 2023 via the link (In Turkish).
You can reach Income Tax Communique No. 323 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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