Ramadan; the month of fasting, starts on 6th of June this year and continues until 5th of July.
Turkish Labor Law 4857 has no special arrangements or provisions for Ramadan and as per the Turkish Constitution and Article 5 of Labor Law there can be no discrimination amongst people or employees based on religion and sect. So there cannot be any discrimination between fasting and non-fasting employees.
However as many employees are not going to be having lunch during the daytime, some companies stop giving meal in their premises and chose to provide their fasting personnel with what can be called “Ramadan Packets” which consist of basic food items. Paying cash instead of supplying foodstuff is another alternative.
On the other hand non-fasting personnel may be provided with meal vouchers or tickets to have lunch out of the premises or just be paid in cash.
All these allowances cash or in kind are deemed as a part of the wage, but they vary with regard to income tax and social security premium liability.
MEALS PROVIDED IN PREMISES
Meals provided by employers in the premises of a company or through a restaurant or a caterer are exempt from income tax and not subject to social security premium contribution.
Meals regularly provided in the premises will also be included in the calculation of severance pay base (the last 30 days’ wage).
RAMADAN PACKAGE/SUPPLYING FOODSTUFF
Providing Ramadan Packets are regarded as benefits in kind according to Social Insurance and General Health Law, Article 80 and should not be taken into account in calculation of earnings subjected to SSI premium.
But total net invoice amount of supplied foodstuff is subjected to income tax, as per Income Tax Law, Article 63.
PAYING CASH FOR MEALS
If an employer chooses to pay in cash for the meal, this payment is considered as part of the wage and is subject to income tax withholding as per Income Tax Law, Article 61.
Mail cash allowance is reducible only from daily earning subjected to premium up to an amount not exceeding 6% of daily gross minimum wage valid in relevant month (3,29 TL for 2016). Exceeding part is subject to premium contributions.
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 meal tickets are regarded as benefits in kind and are not subject to premium contribution.
With regard to tax liability there is an exemption, for the virtually worked day in the year 2016, daily amount of meal voucher/check up to 13.70 TL is exempted from tax.
This exemption is applicable only for the meal tickets used on meals and belonged to virtually worked days. Where they are spend on products other than meals and foods, the amounts paid for them must be considered as part of the wage and must be subject to income tax.