Labor Cost of Employer in 2019

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As we earlier informed you, 2019 monthly gross minimum wage has been determined as 2,558.40 Turkish Lira. This 26.05% wage hike is higher than the expected increase, and will considerably impact the labor cost of employer. Because minimum wage is a key determinant of many payroll parameters in Turkey, the wage hike will inevitably trigger increases in the other wages.

Minimum wage support, which has been provided during recent years, is expected to continue through the year. The support amount is estimated to be between 100 and 150 Turkish Liras. 

Employer Cost of Minimum Wage

5% Treasury support is applied to companies which fulfill the certain conditions. The tables below show the employer cost with and without the 5% incentive.

Gross Monthly Wage 2.558,40 ₺
   
Employer Cost (without incentive)
SSI Employer Share   20,5% 524,47 ₺
Employer Share of Unemployment Premium 2% 51,17 ₺
Total Employer Cost 3.134,04 ₺
   
Employer Cost (with incentive)
SSI Employer Share   15,5% 396,55 ₺
Employer Share of Unemployment Premium 2% 51,17 ₺
Total Employer Cost 3006,12 ₺
   
Employer Cost (for retired employees)
SSI Employer Share   24,5% 626,81 ₺
Employer Share of Unemployment Premium 0
Total Employer Cost 3.185,21 ₺

Cost of Maximum Wage Subject to Premium

There is not such an amount determined as maximum wage, but in Turkey's legislation there is a limit for earnings subject to premium. For the wages over this limit there will not be any additional SSI premium contribution both for employee and employer.

Monthly cap of earning subjected to premium is calculated as 7,5 times of monthly minimum wage, and it increased to 19.188 TRY for 2019.

Net earnings of employees whose wages are over the SSI cap will get slightly lower, because their share of SSI premium will be increased. On the other hand employer share of SSI premium will get slightly over together with their cost for wages over the cap limit.

Tables below show the employer's cost of maximum wage subject to premium with and without the Treasury incentives.

MONTHLY SSI CAP OF EARNINGS 19.188 ₺
   
Employer Cost (without incentive)
SSI Employer Share   20,5% 3.933,54 ₺
Employer Share of Unemployment Premium 2% 383,76 ₺
Total Employer Cost 23.505,30 ₺
   
Employer Cost (with incentive)
SSI Employer Share  15,5% 2.974,14 ₺
Employer Share of Unemployment Premium 2% 383,76 ₺
Total Employer Cost 22.545,90 ₺

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