Turkish Labor Law
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Cash compensation or cash indemnity is a kind of additional payment made to employees dealing with or responsible for cash flow in pay-desk, cashier’s office and so on. This payment is intended to compensate the cash deficit that may occur during such employees’ transactions.
Paying cash compensation is not obligatory for the employers; however it is very common in practice, as a kind of insurance for above said employees.
DEDUCTION OF CASH DEFICIT FROM EMPLOYEE’S SALARY
It Is a controversial issue whether cash deposits can be deducted from employee’s salary or not. In the light of Labor Law and ruling of Supreme Court’s rulings this kind of deduction doesn’t’ seem possible.
Article 62 of Labor Law 4857 reads as follows “no deductions of any kind may be made from an employee’s wages on the grounds that the daily or weekly working hours applicable to any type of work have been reduced by law, or by reason of the fulfillment by the employer of any legal obligation or because of any mandatory obligation imposed on the employer by the provisions of this Act.
NOT SUBJECTED TO SSI PREMIUM
As per article 80 of Social Security and General Health Insurance Law No 5510, cash compensation is not subjected to SSI premium contribution.
SUBJECT TO INCOME TAX
Cash compensation is considered as wage and subject to income tax.
As per article 61 of Income Tax Law No. 193; “Wage is a benefit provided by cash in kind and cash, represented by cash, in return of services performed by employees registered and subject to an employer.
It does not change the true nature of wage by paying it under the names of indemnity, allowance, cash compensation (Financial Liability Indemnity), allocation, increment, advance, remuneration, attendance fee, premium, bonus, in return of an expense or determined by a particular percent of revenue provided not to have the attribute of a partnership.
SHOULD BE INCLUDED IN THE CALCULATION OF SEVERANCE
As a rule qualified employee shall be paid a severance pay equal to last 30 days’ gross wages for each full year of employment.
In calculation of the last 30 days’ wage, the wage paid and the some contractual and statutory benefits in kind provided by employer shall be taken into account. Also periodical (annually, quarterly etc.) payments such as bonuses, cash compensation etc. will be added in monthly basis.
