Legal News


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Finally, the most awaited issue of the new year, promised premium incentive aimed to reduce to increased employment cost arising from about %30 minimum wage hike became clear.

The government’s omnibus bill with the effect date of 1st January 2016 has got through the parliament and the Provisional Article 68, that sets forth the procedures and conditions of benefiting from the fixed monthly 100.00 TL premium refund for employers has been appended to Social Security and General Health Insurance Law No 5510, and is expected to be issued in Official Journal in a short time.

Employers will be receiving daily 3,33 TLpremium refund throughout 2016for each worker whose wage (earnings subject to premium) werenotified under daily gross 85 TL (monthly gross 2.550.00 TL) in 2015, and for each personnel employed in new enterprises established/registered within 2016.


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MINIMUM NET WAGE  Labor Minister Süleyman Soylu  announced that Minimum Wage Determination Committee has reached an agreement on the monthly minimum net wage that will be 1.300 TL ($446) by the beginning of the year 2016 as expected.  

And the most-awaited news for the business community, related to  incentives and subsidies to be launched by the government to reduce the burden of employers came from the Labor Minister, as he said ahead  of the committee's meeting that government was to cover  the %40 of employer's extra cost which is monthly 274 TL*40/100=110 TL for each employee, per month. The support arrangement will be valid only for  2016.

Incentives for Employing Women and Youth (6111) is Extended

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incentives-for-employing-women-and-youth-6111-is-extendedUnemployment rate of women and youths are comparatively high in employable workforce in Turkey. One of the most important regulations to encourage the employment of these groups is the provisional articles added to the Unemployment Insurance Law Nr 4447 by Bag Law Nr 6111.

Colloquially known as "incentive 6111" is intended to create employment by granting social security premium incentives for employing women, the youth and those with vocational qualification certificate. Pursuant to said incentives the employer contribution share of some personnel's social security premiums will be paid from the Unemployment Insurance Fund for certain periods and under some condition stated below.

Meal Tickets / Vouchers Tax Exemption Increased

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meal-tickets-vouchers-tax-exemption-increasedAs we are approaching towards the end of 2015 new payroll parameters to be applied during next year comes to light one by one.

Instead of providing meal allowance in cash or supplying foodstuff, employer may choose to provide employees with meal vouchers or tickets enabling them have their lunch outside of workplace. These vouchers or tickets  up to 13.00 TL daily (for 2015) was exempted from income tax; for the year 2016 daily exemption amount is increased to 13.70 TL daily.

2016 Tax Deductions For Disabled Workers

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2016-tax-deductions-for-disabled-workersIn our recent article dated 22 December 2015 we discussed on “Incentives for Employees with Disability” which also includes the disability tax allowance amounts determined depending on degree of disability by government every year in accordance with Article 31 of Income Tax Law No. 193

The increased monthly amounts to be deducted from taxable income base in 2016 are as follows;

Taxable Gross Income Brackets and the Tax Rates in 2016

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taxable-gross-income-brackets-and-the-tax-rates-in-2016One of the most important parameter in the calculation of wages is the income brackets and the tax rates applied to them. Withholding tax amount on the wages is calculated by taking into consideration the cumulative income tax base and the above rates which is determined for every year.

The new taxable income brackets and the tax rates in 2016 issued in Official Gazette Nr. 29573, dated 25 December 2015 are shown below:

2016 Action Plan Announced

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2016-action-plan-announcedTurkish PM Davutoglu announced his government's 2016 Action Plan intended for the realization of pre-election pledges, and includes some critical reforms which will have serious impact on the business world.

The plan will be implemented according to a schedule and contains numerous reforms and promises which will be put into effect within three months to one year.

We choose some of the significant ones and their potential effects on your business you may be interested most.

Minimum Wage Rise and Its Cost to the Employer in 2016

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minimum-wage-rise-and-its-cost-to-the-employer-in-2016In our recent article published in website we informed you of the Government’s pre-election pledge that the monthly net minimum wage will be raised to 1.300 TL as of January 2016, from the current 1.000 TL. This 30% rise has caused a great concern for the private sector employers who will be facing with a highly increased labor costs, and varying calculations about the cost of employer are being announced from different sources. This variation in calculations arise from the uncertainty whether Minimum Living Allowance (MLA) or/and incentives will be included in the net amount of minimum wage or not. Now we are going to introduce our estimated calculation by taking the various parameters into account.

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