How will the Short Term Work Allowance Reflect on the Payroll?

Short term work allowance is one of the most important issues on the labor law agenda in Turkey as the pandemic intensifies. Short-term work allowance has been in the Turkish Labor Law for a long time but the need for application has arisen recently. The next question is: how will the short term allowance look like on the payroll?

What are the Conditions for Short Term Work?

Short term work allowance comes into effect if work stops completely due to short time work, crisis or challenging causes, or if work time decreases by at least 1 in 3. Under these circumstances, ISKUR pays the unpaid portion of the worker wages.

How to Record Missing Days in Payroll?

For the short-time workplaces, the applications must first be approved by İŞKUR. Upon approval, the employer will pay the first week’s wage for the worker as a half wage. The remaining period will be recorded as missing days.

There are two different ways of showing short term work allowance on payroll:

  • Cases when work stops during the whole month
  • When work time is reduced

1- Cases When Work Stops During the Whole Month

The workplaces, where work is completely stopped, should record the remaining weeks as missing days after paying the worker half the wage of the first week in order to benefit from the short term work allowance. The reason for the missing day should be selected as “18-Short Term Work Allowance”. If the employee has a missing day due to other reasons in the same month, the notification should be reported by selecting “27-Short Term Work Allowance and Other Reasons”.

For example, suppose that as of April 1, a firm whose application has been approved has stopped working for a full month. In this case, in accordance with Article 40 of Labor Law No. 4857, the worker must be paid half a week for the first week. For 7 days between 1 and 7 April, half of the employee’s wage is calculated. Even if the fee is paid halfway, the employee’s premium day is notified to the Authority as 7. For other days, missing days are notified for short term work allowance.

2- When Work Time is Reduced

Workplaces with reduced work time should keep track of which worker worked how long, calculate the wages and pay the employee over the time worked. If non-working periods are to be reported together with “18-Short Work Allowance” or other missing days reasons, “27-Short Work Allowance and Other Reasons” should be selected.

If workers are working every day but working less than the regular weekly working time, wage and missing day should be determined based on the time they work.

For example, let’s assume that working time decreases from 225 hours to 150 hours per month, as a result of the activity in the workplace decreases by 1 in 3. The employer calculates and pays the employee the wage of the 150-hour period he/she works. From the 150 / 7.5 hours account, the working time is reported to the institution as 20 premium days. The remaining 10 days are reported as missing days for short term work allowance. As a result, the worker receives 20 days of wage from the employer in full, and 10 days of wage from İŞKUR as a short term work allowance.

If the work is distributed among the workers on certain days of the week, the wage should be paid on the days they work, and the days not worked should be reported as missing days for the short term work allowance.

For example, suppose that workers in the workplace work 2.5 days a week in 2 groups. At the end of the month, the total days of work for each group is 15. While the workers are paid by the employer for the 15 premium days they worked, the remaining 15 days are shown as missing days for the short term work allowance.

How is the Short Work Allowance Calculated?

Short term work allowance is calculated over the daily wage of the worker. The average of the last 12 months’ wage is taken into account in order to determine the daily wage of the worker. 60% of the daily wage is paid to the worker as short term work allowance. There is no social security premium and income tax deduction from the short term work allowance. Only stamp duty is deducted from the allowance.

The lower and upper limits are also set for short-term work allowance. The lower limit is 60% of the minimum wage, the upper limit is 1.5 times the minimum wage.

Lower Limit
Daily: 58.96 TL

Monthly – 1,765.80 TL / After Stamp Tax Deduction 1,752.40 TL

Upper limit
Daily: 147.15 TL

Monthly – 4,415.50 TL / After Stamp Tax Deduction 4,380 TL

Calculation Example

Suppose that the average wage of the worker for the last 12 months is 6,000 TL gross. 

When 14 days are recorded as missing days due to short term work, the employer pays the worker a 16-day wage; which is equal to 6000 TL / 30 Days x 16 Days = Gross 3,200 TL.

The short term work allowance is:

By controlling the upper limit, it will be calculated as 60% of the employee’s daily earnings.

When we calculate the workers’ wage, the amount is 6.000 TL / 30 Days x 14 Days = 2.800 TL.

If the Upper Limit for 14 days; 147,15 x 14 Days = 2,354,40 TL.

For this reason, the 14-day short term work allowance will be paid to the employee by deducting stamp tax over the upper limit.

2.354.40 x 0.00759 (Stamp Tax Rate) = 17.87

2.354,40 – 17.87 = 2.336,53 TL.

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