Increase in The Cap of Daily Earnings Subjected to Premium

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Cap ArticleCurrently daily cap of earning subject to premium are calculated as 6,5 times of daily minimum wage. This is the maximum limit that premium deductions can be made from, and it is 356,85 TRY (monthly 10.705,50 TRY) for 2016.

Now with the new government proposal, it is strongly expected that starting from the January 2017 the cap of earnings (both daily and monthly)subject to premiums will be increased to 7,5 times of daily (and monthly) minimum wage.

 As a result of the change employer will be paying more premium contribution for cap wages.

For better understanding, we can make a comparison by taken the current 2016 monthly gross minimum wage as a base.

Employee monthly wage: 12.352,50 or higher.

Currently/6,5 times:

Monthly Gross Minimum wage: 1.647,00 TL

Monthly Cap of earning subject to premium: 1.647,00 * 6,5 = 10.705,50 (Daily 356,85 TL)

Even the wages 12.352,50 or higher are subject to same premium amount.

In case of applying the 7,5 times:

Monthly Cap of earning subject to premium: 1.647,00*7,5= 12.352,50 (Daily 411,75) 

 

PREMIUM CONTRIBUTION OF EMPLOYER                       Rate 6,5         Rate 7,5            RISE

CAP OF EARNING SUBJECT TO PREMIUM                      10.705,50       12.352,50        1,647,00

SSI EMPLOYEE CONTRIBUTION (%15,5)                         1659,35         1.914,64          255,29

UNEMPLOYMENT PREMIUM-EMPLOYER ( % 2 )               214,11           247,05             32,94

TOTAL PREMIUMTO BE PAID BY EMPLOYER                   1.873,46       2161,69            288,23

 

In the current situation, employer will pay 1873,46 TL premium contribution for the wages 10.705,50 TL and higher (i.e 1873,46 TL even for 12.352,50 TL and over).

In case the 7,5 rate is applied employer will be paying 2161,69 TL premium for the wages 12.352,50 TL and over. (i.e. 288,23 TL more premium).

 

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