No Decrease In Net Minimum Wage

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no-decrease-in-net-minimum-wage

Government bill of law, intended to prevent any decrease in 2016 net minimum wage due to shift in the taxable income brackets, has been accepted in Parliament's Planning and Budget Commission and expected to be in force soon.

As it is known, Turkey's net minimum wage is determined as 1.300,99 TL (minimum living allowance included) throughout 2016.

In the application of income tax rates, the cumulative income is taken as a base. Until September 2016 the cumulative amount of minimum wage was in the first bracket, which is 12.600,00 and the rate was 15%. But as of October some part of cumulative minimum wage will be shifted to second bracket and 20% income tax will be applied to that part of the wage, and will lower it up to 1.230,00 TL, meaning about 70,00 TL losses on the monthly minimum wage.

Now with the new bill of law, an additional "Minimum Living Allowance" will be provided for minimum wage earners whose net minimum wages drops below 1.300,99 TRY. This addition will cover October, November and December.

 

 

Benefiting Conditions

  • Employees whose gross wage is 1.751,10 TL, but net wage goes down below 1.300,99 TL will be benefiting from the arrangement.
  • Employees whose net wage drops down below the said amount just because leaving and starting their job, or unpaid leave and similar reasons cannot benefit.
  • Employees whose wage decreased but still above 1.300,99 TL cannot benefit.

Example

Employee (A),

Earning: minimum wage,

Marital status: married and have single child, spouse is not working.

Net earnings on January 2016 are 1.344,22 TL.

Net earnings on October 2016 are 1.274,22 due to shift in the income tax bracket.

The lost amount:  1.300,99-1.274,22= 26,77 TL

The amount of 26,77 TL will be added to his minimum living allowance through October -November - December to compensate the decrease caused by the increase in income tax.

 

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