Based on Finance Minister’s last week announcement we had informed you that the tax rate applied to 3rd income bracket will be increased to %30 from %27 in 2018. However, during the discussion in the General Assembly this arrangement has been removed from the draft law (Draft law on Amending Some Tax Laws and Governmental Decrees), and taxable income brackets will be the same next year.
WHAT ARE TAXABLE INCOME BRACKETS AND TAX RATES?
One of the most important parameter in the calculation of wages is the income brackets and the tax rates applied to them. Withholding tax amount on the wages is calculated by taking into consideration the cumulative income tax base during the year.
2017 income tax tariff is as follows;
Income /TRY Tax Rate
0 – 13.000,00 15%
13.000 – 30.000,00 20%
30.000 – 110.000,00 27%
110.000 + 35%
MEDIUM AND HIGH WAGE EARNERS ARE PROTECTED
If the draft had passed through the parliament, the tax rate applied to 3rd bracket would have been increased to % 30 from % 27 in 2018; and medium and comparatively high wages would have been affected most.
After the removal of related arrangement from the draft, tax rate applied to 3rd section will stay 27% as before.
MLA SUPPORT FOR MINIMUM WAGE
On the other hand 2017 net minimum wage will not be affected from the shift on taxable income brackets and will not get lower than 1.404 TRY
With the above said draft law, an additional “Minimum Living Allowance” is provided for minimum wage earners whose net minimum wages drops below 1.404 TRY. This addition will cover October, November and December.