Understanding Employer Tax Obligations in Turkey

Turkey's social security framework is governed by Law No. 5510, the Social Insurance and General Health Insurance Law. This comprehensive legislation establishes the rights and obligations of employees, employers, and the Social Security Institution (SGK) in providing social security benefits. The system covers a wide range of protections, including retirement, disability, unemployment, health insurance, and maternity benefits, ensuring the welfare of employees and their families.

Employers in Turkey are responsible for several mandatory contributions, which constitute essential employee benefits. The total employer contribution rate is 22.5% of the employee's gross salary, broken down as follows:

Short-Term Insurance Branch: 2%
Disability, Old-Age, and Survivors' Insurance: 11%
General Health Insurance: 7.5%
Unemployment Insurance: 2%

Short-Term Insurance Branch (2%)

This branch, fully funded by the employer, covers benefits for temporary incapacity to work. It includes:

Work Accident and Occupational Disease Insurance: Covers incidents occurring due to work. Employers must report accidents within three working days. Benefits include temporary incapacity allowance and permanent incapacity income.
Health Insurance: Provides cash benefits during illness-related absences. Temporary incapacity allowance is paid from the third day of absence, based on medical reports.
Maternity Insurance: Offers benefits for female employees, including temporary incapacity allowance during maternity leave (provided at least 90 days of premiums were paid in the year before birth) and a breastfeeding allowance for each living newborn.

Disability, Old-Age, and Survivors' Insurance (11%)

This is a key component of the long-term social security scheme, funded jointly by employers (11%) and employees (9%). It provides:

Old-Age Pension: Currently, the retirement age is 58 for women and 60 for men, requiring at least 9,000 days of premium payments. For employees under service contracts, this is reduced to 7,200 days. A gradual increase to age 65 is planned between 2036 and 2048. Special conditions apply for miners, individuals with severe disabilities, and those with early aging diseases.
Disability Pension: Granted if a health board determines a loss of at least 60% of working capacity due to non-occupational causes, provided the disability did not exist before employment commenced.
Lump-Sum Payment: Available for individuals who meet the age requirement but are not eligible for a pension, calculated based on total premiums paid.

General Health Insurance (7.5%)

This insurance, with contributions from both employer (7.5%) and employee (5%), aims to protect individuals' health and cover medical expenses. The total contribution rate is 12.5% of the premium-earning income.

Unemployment Insurance (2%)

Effective from January 1, 2024, unemployment insurance contributions are calculated on an income ceiling of 150,018.9 TRY per month. The employer's share is 2%, with the employee contributing 1% and the state also contributing. Foreign nationals are eligible under reciprocity conditions.

Employee Tax Responsibilities in Turkey

Employees in Turkey share the cost of social security, with total deductions typically ranging from 30% to 55% of gross salary, depending on income level. The breakdown includes:

Disability, Old-Age, and Survivors' Insurance: 9%
General Health Insurance: 5%
Unemployment Insurance: 1%
Income Tax: 15% - 40%

Income Tax Rates for 2024

Turkey employs a progressive income tax system. The tax brackets for 2024 are as follows:

Annual Income Bracket (TRY)	Tax Rate
0 - 158,000	15%
158,001 - 330,000	20%
330,001 - 1,200,000	27%
1,200,001 - 4,300,000	35%
Over 4,300,000	40%

Navigating Turkey's social security landscape can be complex for international companies. SailGlobal provides expert guidance to ensure full compliance with local regulations, helping you manage payroll and benefits efficiently while avoiding costly penalties.

Turkey Employer & Employee Taxes 2024: A Complete Guide to Social Security Contributions