Legal News

How to Calculate SGK Base?

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SGK base (also called as Earnings Subject to Premium) is the amount SGK and unemployment premium rates are applied.

An employee may receive different type of payments along with his/her basic salary, such as allowances, bonuses and other fringe benefits. All these payments constitute the employee’s total earnings.

EARNINGS SUBJECT TO PREMIUM

In calculation of SGK base it is important to know which earnings (payments) are subject to premium and which are not. Because the pay items are treated differently in the payroll from the point of premium deduction.

Most common earnings subject to premium are as follows;

  • base salary
  • overtime wage
  • transportation allowance paid in cash
  • premium
  • bonus

EARNINGS NOT SUBJECT TO PREMIUM

As per Social Security And General Health Insurance Law No. 5510, Article 80; "benefits in kind and funeral, birth and marriage benefits, duty travel allowances, mobile duty compensation, severance pay, dismissal pay or collective payment in the form of severance pay, estimated cost, pay in lieu of notice or cash compensation, and food, child and family increments of which amount will be determined the Institution in years, private health insurance premiums and personal retirement contribution fees, not exceeding 30% of the monthly total minimum wage, paid by the employers to private health insurances and personal retirement system for insurance holders shall not be included in the earnings subject to premium."

SGK PREMIUM BASE LIMITS

SGK base, also called “Earnings Subject to Premium,” has a lower and upper limit. In other words, the base cannot be lower or over these limits regardless of the total amount of earnings.

The lowest premium base is the daily or monthly minimum wage, and upper limit (cap of SGK base) is equal to 7.5 times of daily or monthly gross minimum wage. SGK contributions don’t change over this cap amount.

Lowest and Cap SGK *(SSI) Base Amounts

As monthly gross minimum wage is determined as ₺2,558.40 for 2019, we can calculate the limits as follows:

Daily SGK Premium Base/Minimum Limit 85.28 TRY Monthly SGK Premium Base/Minimum Limit 2,558.40 TRY
Daily SGK Premium Base/ Maximum Limit (Daily Cap of SGK Premium Base) 639.60 TRY Monthly SGK Premium Base/ Maximum Limit (Monthly Cap of SGK Premium Base) 19,188.00 TR

*SGK (Social Security Institution = SSI)

For earnings exceeding daily 639.60 TRY and/or 19,188.00 TRY SGK premium will not be applied.

Tax Exempt Daily Allowance 2019/2

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Daily Allowance is the money paid to employees in daily basis while they are working away from their workplace whether within the same country or abroad.

Tax exempt daily allowance amounts are determined by General Directorate of Budget and Fiscal Control in line with Travel Expense Law No.6245 twice a year.

01.07.2019-31.12.2019 DOMESTIC TAX EXEMPT DAILY ALLOWANCE AMOUNTS
Gross Salary (TRY) Daily Allowance (TRY)
3,482.61 and over 61,50
3,457.69-3,482.60 51,60
3,153.08-3,457.68 48,15
2,765.39-3,153.07 45,20
2,293.94-2,765.38 39,85
2,293.93 and less 38,75

The maximum daily allowances payable for business travel outside Turkey are as follows:

(GROSS SALARY AMOUNTS TRY)
Countries and Currencies II.Column III.Column IV.Column V.Column VIColumn VII. Column
3,482.61 and over 3,457.69 - 3,482.60 3,153.08 - 3,457.68 2,765.39 - 3,153.07 2,293.94 - 2,765.38 2,293.93 and less
USD.(USDDollar) 182 146 124 117 110 93
Germany(Euro) 164 131 111 105 99 83
Australia (Aud) 283 227 192 181 171 143
Austria(Euro) 166 132 112 106 100 84
Belgium(Euro) 161 128 109 103 97 81
Denmark (dkr) 1.238 988 838 791 746 627
Finland(Euro) 148 119 100 95 90 74
France (Euro) 160 127 108 102 96 81
Holland (Euro) 156 125 106 100 94 80
England(Pound) 115 91 78 74 69 59
Ireland (Euro) 155 124 105 99 94 78
Spain (Euro) 158 126 107 101 95 80
Swiss(sek) 1.359 1.085 919 867 819 687
Switzerland(chf) 283 226 192 181 171 143
Italy(Euro) 152 122 104 98 92 77
Japan (jpy) 31.405 25.127 21.325 20.118 18.901 15.914
Canada (cad) 244 195 165 156 147 125
Kuwait(kvd) 50 40 35 33 31 25
Luxemburg(Euro) 161 128 109 103 97 82
Norway(nok) 1.193 952 808 762 719 604
Portugal(Euro) 155 124 105 99 93 78
Saudi Arabia (Suudi A. riyal) 617 492 418 395 372 313
Greece(Euro) 158 126 107 101 95 80
Kosovo(Euro) 123 98 83 78 74 63
Other EU Count. (Euro) 127 101 86 81 76 65
Other Countries(USD Dollar) 157 125 106 100 95 80

Severance Pay Upper Limit 2019/2

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Severance pay upper limit is announced as 6.379,86 TRY for the second half of the year. This limit will be applied within the period between 1 July 2019 and 31 December 2019.

As is known, qualified employee shall be paid a severance pay equal to last 30 days' gross wages for each full year of employment. In calculation of the last 30 days' wage, the wage paid and the some contractual and statutory benefits in kind provided by employer shall be taken into account. Also periodical (annually, quarterly etc.) payments such as premium and bonuses will be added in monthly basis.

In Turkey there is a cap for severance pay, however, this limit may be increased by provisions of employment contracts.

Also please note that there is no cap amount for severance pay for press employees.

Click for 2019 / 2 Parameters 

Late Payment Fee is Increased

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Late payment fee applied to public receivables is increased from 2% to 2,5% monthly (yearly 30%).

Late fee (determent interest rate) is imposed in case of not paying in due dates.

As per Presidential Decree 1266, published in the Official Gazette No. 30816, dated 26 July 2019, starting from 1st of July, late payment fee is increased monthly 2,5%
2,5% late fee will be imposed in case of non-payments of installments that should made in line with Structuring laws 6111, 6552, 6736, 7020 and 7143.

Financial Holiday 2019

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Financial holiday is created by Law No. 5604, published in the Official Gazette No. 26476, dated 28 March 2007. The Law aims at giving a break for the accountants (public accountants, professional accountants, sworn-in certified public accountants) between 1 - 20 July every year.

This year financial holiday stars at July 2, 2019 and ends at July 22, 2019. Due date of following legal declarations will be extended up to 29 July (Inc.).

  • SSI monthly premium and service declaration,
  • Workplace registration declaration,
  • Start of employment declaration,
  • Leaver declaration,
  • Objection to administrative fines,
  • Due date of administrative fine payments,
  • Due date of payment of premiums,
    • Objection to premium debts,
    • Due date for the submitting of documents required by inspectors.

DECLARATIONS OUT OF SCOPE

  • Work accidents and occupational disease,
  • Approval of reports related to maternity and sickness,
  • Collective redundancy declaration submitted to İŞKUR (Turkish Employment Agency).

Social Security Agreement between Turkey and Hungary- Circular No. 2019/13.

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Social Security Agreement between Turkey and Hungary signed in Budapest on 24th February 2015 has been accepted in Parliament and the related Law No. 6961 has been published in the Official Gazette on 3rd April 2017. The agreement has entered into force on 1st April 2018 by the Cabinet Decree No: 2018/11543.

The points related to implementation of the agreement is explained in Circular 2019-13 issued by “SSI General Directorate of Pension Affairs”. The main points are as follows.

  • Provisions related to unemployment insurance will not be applied to those working independently,
  • Provisions related to work accident, occupational sickness and unemployment insurance will not be applied to personnel working in public administrations.

POSTING – SECONDMENT

Secondment/posting period is 24 calendar years.

  • Employed person: In case an employee is send by the employers to work temporarily on behalf of this employer in the other contracting country, that employee will continue to be subject to the legislation of sending country, on condition that posting period doesn’t exceed 24 calendar years and the posting doesn’t aimed at replacing a previously posted person.
  • Self-employed: In case a self-employed person temporarily transfer his business to other contracting country he will be subject to legislation of the first country, on condition that posting period doesn’t exceed 24 calendar years, on condition that self-employed activity doesn’t exceed 24 calendar months.
  • In the above cases, 24 years period may be extended for once up to maximum 60 months by the mutual request of employee and employer, or by the personal request of self-employed person.

For full text of the agreement in Turkish, Hungarian and English visit here.

Work Permit Fees Filed Abroad Will be paid in Turkey

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In a broad applications WP fees will be paid in Turkey by the employer.

Applications for work permits can be made inside or outside Turkey. Foreigners residing abroad shall apply to the Turkish Consulates in their country of residence or of citizenship.

In case the WP application is accepted as appropriate, the work permit fees are used to be paid to the related consulate during getting the “work visa”. But now, with the announcement issued in the Ministry of Family, Labor and Social Services, International Workforce General Directorate “as of 17 June 2019 for the foreigners whose application accepted as appropriate the WP fees will be notified to employers in Turkey and will be paid by the employers as in the same way paid for in-country applications.

WORK PERMIT APPLICATION ABROAD

The steps and necessary documents for embassy application abroad are as follows:

•             Before the consulate visit fill in the “Visa Application form” in the web-side konsolosluk.gov.tr

When you go to the related consulate of Turkey to apply for work visa, please take the following documents with you:

•             Passport

•             Employment Contract (2-embassy contract) (Signed scanned copy could be enough)

•             Embassy letter (Our Invitation letter)

•             One photo (biometric passport photo)

When you fill in the Visa Application form and submit the other documents, a reference number will be sent to you by e mail. Please send the reference number to your employer. Also send the signed our copies of contracts just after you sign them.

Also, the following documents for Turkey stage will be needed;

•             Reference number

•             Sort Copy of passport

•             One photo

•             Diploma (soft copy)

•             Employment contract (as mentioned above).

After Turkey stage is completed WP fees information will be notified to the Employer.

Generally, WP cards will be sent to the employer in the following couple of days.

How can You Take the Ramadan Feast 9 Days Holiday?

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This year holy Ramadan Feast will be observed between Tuesday, 4 June and Thursday 6 June, also Monday, 3rd of June is the eve of the feast and half day holiday.

As per the Government announcement many of the public sector employees are allowed administrative leaves for Monday, 3rd June and Friday, 7th June. As a result public employees will have 5 days holiday uninterruptedly between 3rd and 7th July, and many of the public institutions and agencies, schools including SSI departments and tax offices will be closed during this period.

Taking into consideration the two weekends before and after the Feast, the holiday is extended to 9 days for public employees.

Unfortunately, administrative leaves granted by the Government don’t include the private sector employees, who will have 3, 5 days of leave starting from 3rd June, 13.00 o’clock and continuing until 6th June,

However, private sector employees may extend their holiday up to 9 days, provided that their employer consented.

TAKING PARTIAL ANNUAL LEAVE

Though not obligatory, some employers let their personnel to take one or two days of their annual leave and combine them with the Feast holiday in order to enjoy their holidays uninterruptedly.

COMPENSATORY WORK

Compensatory work is arranged in Article 64 of Labor Law No. 4857, and in Article 7 of Working Time Regulations;

“In cases where time worked has been considerably lower than the normal working time or where operations are stopped entirely for reasons of suspending work due to force majeure or on the days before or after the national and public holidays or where the employee is granted time off upon his request, the employer may call upon compensatory work within two months in order to compensate for the time lost due to unworked periods.”

With the employer’s consent you may take the half day of the eve (3rd of June and 7th of June off and can make up unworked hours.

It should bear in mind that compensatory work must be done within sixty days after Feast holiday.

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