2018 monthly net minimum wage will not get lower than 1.603,12 TRY. Any decrease due to the shift on taxable income brackets will be compensated by an increase in Minimum Living Allowance (AGİ).
In Turkey, tax rates are applied by taken the cumulative income as a base. As a result the minimum wage shifts to second tax bracket after the first half of the year (from 15% to 20%) and get lower than 1.603,12 TRY.
It is stipulated in Law No. 703 that minimum living allowance support for employees will be permanent. Minimum wage will not be affected from the shift on taxable income brackets and will not get lower than the net amount determined for single employee. For minimum wage earners the difference between the net income and the minimum wage for single will be compensated by an increase in minimum living allowance equal to this difference.
Income Tax General Communique Serial Number 265 has provided some explanations and examples as regard to implementation.
- Employees whose net wage goes down below 1.603,12 TRY (monthly net minimum wage for single) will be benefiting from the arrangement. This lower limit is also valid for employees married plus children.
- Employees, whose net wage drops down below 1.603,12 TRY, just because leaving and starting their job, or unpaid leave and similar reasons cannot benefit.
- Employees, whose wages decreased but still above 1.603,12 TRY cannot benefit from the MLA support.
Employee: Single and has no child.
January Net salary: 1.603,12 TRY
Because of the shift on the taxable income bracket employee will receive less in September. October, November and December. For compensating the difference the following amounts will be added to Minimum Living Allowance and paid to employee
For September: 1.603,12-1.566,84=36,28 TRY
For October/November/December: 1.603,12-1.516,87=) 86,25 TRY
Employee: Married+3 Children + Spouse not working
January Net salary: 1.709,67 TRY
Because of the shift on the taxable income bracket employee will receive;
September: 1.673,39 TRY
October, November and December: 1.623,42 TRY
As his salary doesn’t go below 1.603,12 TRY he will not benefit from Minimum Living Allowance support.