TURKISH PAYROLL GUIDE
The following fixed parameters of 2018 represent the basic payroll accounting in Turkey. There might be other benefits and allowances applicable to the employees. The below calculations exclude daily food, family and children allowances and other exemptions. Please consult your accountant for detailed information. The following information is for informational purposes only.
Our Payroll Services
-Service of preparing tally sheet which is the most important data in the process of preparing the payroll
- Payroll monitor the dues of the employer to the employees by controlling the daily work hours and calculate accurately the earnings of the workers in accordance with applicable laws.
-Processing, calculating, controlling and accounting services for payroll records according to the legislation of the Tax and Social Security Institutions
- Payroll serve to calculate and show the deduction the employer made from its revenue and amount of taxes paid to the government on behalf of the workers, the control and accounting of this procedure display the importance of this service.
– Service for preparing lists of normal, overtime, bonus and other payments for each employee
- With the monitoring, regulation and calculations of the accounts on the monthly payroll. The reliability of the company is increased in case of an inspection.
-Service for hiring and dismissal of employee according to the legislation of the Social Security Institution
- The worker planned to be recruited will be informed to the social security institutions with a recruitment declaration, and the recording of the tally from the first day of employment.
-Service for preparing Social Security affidavit
- Payroll prepared with tally recorded during the month will be registered with the e-declaration in the social security institution system, within this, formal obligations on behalf of the personnel are ensured.
-Service for calculating notice, severance pay and other compensations and liabilities
- Legal compensations of the personnel employed during its working period are calculated and are prepared to be paid.
-Service for preparing payments lists in electronic format
- Personnel wages are distributed via banking transaction in accordance to the legislation.
-Service for preparing and keeping personnel files
- Materials presenting importance to the employers are kept and preserved in the personnel files such as ID photocopies, residence certificate, photos etc… and are made accessible to the employer when it is needed.
Ata institutonal consultancy provides the service throughout whole Turkey including İstanbul, Ankara, Antalya, İzmir, Mugla, Bursa and Gaziantep. İf you have any questions, please feel free to contact us.
PAYROLL PARAMETERS FOR 2018
I- GROSS SALARY:
Gross Salary refers to the amount of salary which is earned by employees according to the Turkish Labor Law.
- Gross Salary = Net Salary + Total Deductions (Social Security Premium Employee’s Share (including Unemployment Insurance) + Income Tax + Stamp Tax)
II- NET SALARY:
It is the amount of salary actually received by the employees.
- Net Salary = Gross Salary – Total Deductions
III- EMPLOYER’S COST:
In addition to the gross salary, employer must pay the employee’s share of social security and unemployment insurance premiums.
- Total Cost of Employee to Employer = Gross Salary + Social Security Premium Employer’s Allocation (including Unemployment Insurance)
IV-SOCIAL SECURITY PREMIUM AND UNEMPLOYMENT INSURANCE:
Total social security premium is the 37.5% (including unemployment insurance) of Earning Subjected to Premium Insurance. 15% of the total is deducted from the gross salary as employee’s allocation and 22.5% of the Earning Subjected to Premium Insurance is calculated additionally as the employer’s allocation. (Effective from 01/09/2013 Short term insurance branches premium rate is determined as 2% of the earnings subjected to premium insurance regardless of the gravity of danger of the work.) – See the post regarding the Amendment in the Short Term Insurance Branch Premium–
|Insurance Branches||Employee’s Allocation (%)||Employer’s Allocation (%)||Total Allocation (%)|
|Short Term Insurance Branch Premium||–||2||2|
|Invalidity, Old Age and Death Insurance Premium||9||11||20|
|General Health Insurance||5||7,5||12,5|
SOCIAL SECURITY MINIMUM AND MAXIMUM RATES
|MINIMUM (01 Jan 2018 – 31 Dec 2018)|| |
|MAXIMUM (01 Jan 2018 – 31 Dec 2018) – MINIMUM (x) 7,5|| |
V- INCOME TAX:
Employee’s Wage Income is subjected to income tax and employer is responsible to deduct and pay the tax office on behalf of the employee.
- Income Tax Base (Taxable Income) = Gross Salary – Social Security Premium (Employee’s Share)
- Income Tax = Taxable income * Income Tax Rate (%)
Income Tax (Cumulative) (Wage Income)(2018)
|Up to 14 800 TL|| |
|Between 13480 and 34 000 TL (For the 14 800 TL of the total amount, income tax is 2220 TL) In excess|| |
|Between 34 000 and 120.000 TL (For the 34 000 TL of the total amount, income tax is 6.060 TL) In excess|| |
|Over 120.000 TL (For the 120 000 TL of the total amount, income tax is 29 280 TL) In excess|| |
VI- STAMP TAX: (2018)
Stamp tax is based on gross salary. The rate of tax is 0,00759
- Stamp Tax = Gross Salary * Stamp Tax Rate
VII- MINIMUM LIVING ALLOWANCE (MLA)
Effective from January 1st 2008, a tax-free minimum living allowance is available for wage earners. Income tax payment is calculated by deducting the MLA from the income tax.
The calculation is based on the minimum wage regardless the salary of the employee. In calculation of the minimum living allowance, the marital status and the family composition of the employee are taken into account.
Calculation: 50% for the taxpayer, 10% for the spouse provided that is unemployed, 7.5% for each of the first two dependent children, 10% for the third dependent child and 5% for each of the following dependent children.
- Income Tax Payable = Income Tax – Minimum living Allowance
VIII – DISABILITY DEDUCTION
The employee who lost working capacity at minimum 80 % is regarded as 1st degree disabled, minimum 60 % is 2nd degree disabled, minimum 40 % is 3rd degree disabled worker. While calculating the income tax, the following monthly deductions are applicable to the taxable income of the employees (2018).
- For the 1st degree disabled 1000 TL
- For the 2nd degree disabled 530 TL
- For the 3rd degree disabled 240 TL
MINIMUM WAGE CALCULATION – SINGLE EMPLOYEE WITH NO CHILDREN*
( PERIOD BETWEEN 01.01.2018 – 31.12.2018)
|Social Security Premium Employee’s allocation (14%)||284,13 TL|
|Unemployment insurance Employee’s allocation (1%)||20,30 TL|
|Income tax base||1725,07 TL|
|Income tax (15%)||258,76 TL|
|Minimum living allowance |
(Single and no children)
|Income tax payable||106,55 TL|
|Stamp tax (0,00759)||15,40 TL|
|Total Deductions (Income tax payable +Stamp Tax + Social Security Premium Employee Allocation +Unemployment Insurance Employee Allocation)||426,38 TL|
|NET SALARY||1603,12 TL|
TOTAL COST OF EMPLOYEE TO EMPLOYER
* Calculation is applicable to single employees with no children. Different Minimum Living Allowance amounts should be considered for other calculations.
**”For the private sector employers who employ insurance holders under item (a) of paragraph one of Article 4 of this Law, the amount corresponding to five points of employer share in the premiums of invalidity, old – age and survivors insurances pursuant to item (a) of paragraph one of this Article shall be covered by the Treasury.” SOCIAL INSURANCE AND UNIVERSAL HEALTH INSURANCE LAW (law no:5510 – Article 8-ı )
WE OFFER EXTENSIVE EXPERIENCE, CONFIDENTIAL AND RELIABLE SERVICES IN THE OPERATION OF THE PAYROLL FUNCTIONS.
“A TURKISH PEO SOLUTION”
EMPLOYEES ARE SAFE UNDER OUR PAYROLL UMBRELLA
“Join our PEO services and gain efficiencies of Scale”
ATA Kurumsal provides payroll umbrella services that assist you manage HR service responsibilities such as payroll, benefits and employees’ compensation. By partnering with Ata Kurumsal, administer payroll for staff located in Turkey efficiently. Minimize your payroll and tax related risks, stay legally compliant.
DON’T BOTHER WITH FORMALITIES – PERMITS
By partnering with Ata Kurumsal, you do not need to bother for employment formalities including work visa-permits, social security registration…etc
STAY LEGALLY COMPLIANT
Our payroll umbrella services designed for your temporary posted workers, by partnering with Ata Kurumsal, you will be free from many payroll & tax associated risks.
Additionally our co-employer model, helps you to minimize many common risks deriving from Turkish Labor Law, OHS Law, Social Security Legislation and all other relevant Turkish legislation.
Employees, starting from their joining date begin to benefıt from Turkish Social Security System
COST EFFECTIVE – SHARING RESPONSIBILITES
Our Co-Employer model especially used by temporary posted workers. Under this model, as an International Company you do not need to be located in Turkey. You can seize the opportunity to expand into Turkey without waiting for months to set up a subsidiary, liaison office or company, ATA Kurumsal PEO services provides you cost effective, reliable and effective solutions for managing remotely your employees in Turkey.