How the Gift Cheques and Lottery Tickets are Treated in Payroll?

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Employees are provided with some benefits in many occasions such as New Year, feasts and other special days. Accounting treatment of these benefits may be different from the point of tax and social security contribution in comparison with the normal wage.


As a rule benefits in kinds (payments in kind by employer provided for employees’ personal or social needs) are not subject social security.

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."

However, it is important how and where to use such gift cheques, vouchers or coupons. If these are used for a certain good or service they are deemed as benefit in kind, but as it is seen in practice, gift cheques are used to buy various type of goods and services in the markets.

As a result, the gift cheques are not exempt from SSI premium and the amount of the cheque should be included in payroll as a wage.


Article 61 of Income Tax Law No. 193 defines the wage as “Wage is a benefit provided by cash or in kind in return of services performed by employees registered and subject to an employer.” So we may easily deduce from this description that payments under the different names such as indemnity allowance, premium, bonus and so on, whether in cash or in kind are deemed as part of the wages and should be taxed.

As per above definition the gift cheques are subject to income tax and should be included in payroll as wage.


Some companies traditionally provide national lottery ticket for their employees. These lottery tickets are treated as in kind benefit, and

  • Exempt from SSI premium contribution, but
  • Subject to income tax.

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