Taxes applicable to employment contracts in Turkey

SGK Employer Contribution: This Contribution is regulated in the Law No: 5510. According to the Law No: 5510, Employers who employ insurance holders within the scope of subparagraph (a) of the first paragraph of Article 4 of the Law No: 5510 deduct the premium amounts of the insured shares to be calculated over the premium earnings of the insured within one month from the wages of the insured and adding the premium amounts corresponding to their own shares to these amounts at the latest for the following month / period. The contribution rate for 2020 is 20%. However, discounts are made for employers who pay their contribution within the period properly that complies with the conditions in paragraph (i) of article 81 of the Law No:5510. With the said reduction, the tax rate becomes 15.5%.

SGK Employee Contribution: The Contribution is regulated also in the Law No: 5510. According to the Law, the tax rate fort he Employee is 14%.

Unemployment Insurance Benefit: The regulation on unemployment insurance benefit is made in the Law No 4447. In line with the artilce 49 of the Law No: 4447, Unemployment insurance benefit is deducted as 1% employee and 2% employer’s share.

Income Tax: The income subject to income tax is determined in Article 103 of the Income Tax Law No: 193.

Stamp Tax: The regulations which is about the Stamp Tax are regulated in the Stamp Tax Law No: 488. Article 1 of the Stamp Tax, The papers written in the table numbered (1) attached to this Law are subject to Stamp tax. Separate tax rates are specified for all papers subject to stamp tax. The rate of stamp tax on receipts issued for money received for salaries and similar services is 7.59 per thousand for 2020.

Minumim Living Benefit: Real persons whose wages are taxed in real way will be able to benefit from the minimum Living Benefit. It is regulated in the Income Tax Law No: 193. According to the article 32 of the Law No: 193, Minimum Living Benefit ; the annual gross amount of the minimum wage applicable to workers older than 16 years old working in the industrial sector and valid at the beginning of the calendar year in which the wage was obtained; 50% for the taxpayer himself, 10% for his wife who does not work and does not have any income, separately for each child; 7.5% for the first two children and 5% for other children.

Cumulative Income Tax Assesment: The cumulative tax assesment is the income tax assesment on the basis of the total amount of the payments of the insured working as insured within a calendar year, which are subject to income tax. The tax base is calculated by deducting the expenses above the income. Rates which are regulated in article 103 of the Income Tax Law are applied in accordance with the calculated basis.