Turkish Labor Law
Towards the end of the year the announcement of the new year’s minimum wage is a highly anticipated announcement. The minimum wage does not only concern minimum wage earners but it is also a parameter that concerns those whose wages are slightly above the minimum wage and all other employees who receive their increases based on this rate. AGI and payroll parameters are also calculated over the minimum wage.
At the same time, the minimum wage is a very important cost factor for the employers. The amount of the minimum wage is determined by the Minimum Wage Determination Commission at the meetings with triple representation of the employer, employee and the state at the end of each year.
Net Amount of Minimum Wage
The suggestions of TURKSTAT, the demands of the labor unions, the minimum wage amount determined by the employer with expectations was gross 3.577,50 TRY.
While the net minimum wage amount was 2.557,59 TRY, the net amount paid to the minimum wage was 2.825,90 TRY with the new single / spouse employee AGI amount.
“Net Minimum Wage Table” according to marital status and number of children:
| Gross Minimum Wage | 3.577,50 |
| Net Minimum Wage/Single | 2.825,90 |
| Net Minimum Wage/Working spouse – No child | 2.825,90 |
| Net Minimum Wage/Working spouse – 1 child | 2.866,15 |
| Net Minimum Wage/Working spouse – 2 children | 2.906,40 |
| Net Minimum Wage/Working spouse – 3 children | 2.960,06 |
| Net Minimum Wage/Working spouse – 4 children | 2.986,89 |
| Net Minimum Wage/Working spouse – 5 children | 3.013,72 |
| Net Minimum Wage/Non-working spouse – No child | 2.879,57 |
| Net Minimum Wage/Non-working spouse – 1 child | 2.919,81 |
| Net Minimum Wage/Non-working spouse – 2 children | 2.960,06 |
| Net Minimum Wage/Non-working spouse – 3 children | 3.013,72 |
There is no restriction on the number of children for AGI, which can be granted for every child. It should be noted that only one of the spouses, both working, benefits from the same child. The restriction is in the amount of AGI. According to the regulations regarding AGI, the maximum amount of AGI a person can receive cannot exceed the income tax paid by 15%, which is the 1st income tax bracket of the minimum wage. With the new minimum wage amount, the income tax amount was also 456,13 TRY. Therefore, according to these calculations, the minimum subsistence allowance can be received for a maximum of 3 children for non-working spouses and 5 children for persons with a working spouse.
Gross to Minimum Wage Calculation
The minimum wage earners are subject to insurance premiums and taxes just like other employees. Therefore, gross minimum wage amounts become net after legal deductions are made.
Gross to Net Minimum Wage Calculation
| Minimum Wage (Gross) | 3.577,50 |
| SGK Base (PEK Base) | 3.577,50 |
| SGK Employee Premium (%14) | 500,85 |
| Unemployment Employee Premium (%1) | 35,78 |
| Income tax base | 3.040,88 |
| Income tax (%15) | 456,13 |
| Stamp Duty Base | 3.577,50 |
| Stamp duty | 27,15 |
| Net Paid | 2.557,59 |
| AGİ | 268,31 |
| Net Paid with AGİ | 2.825,90 |
What Was the Net Minimum Wage for Retired Employees?
While the minimum wage amount of those who work with the minimum wage but have re-entered the working life after retirement is the same as the others in the gross amount, the net amount varies. Premium rates of retired employees paid to SSI are different from other employees. Since they are already retired, they do not pay premiums to the long term insurance branches and the general health insurance branch. They only have to pay the social security support premium (SGDP) set for retirees. Therefore, employers who calculate their wages are deducted a 7.5% SGDP premium from their wages.
Since retired employees are not covered by unemployment insurance, no premium is calculated for unemployment insurance.
The net amount of the minimum wage determined as gross 3.577,50 TRY is 2.785,66 TRY for retired employees (without AGI) With the rate of single / spouse working AGI, the amount is 3.053,97 TL.
Calculation of the Minimum Wage of the Retired Employee from Gross to Net:
| Minimum Wage (Gross) | 3.577,50 |
| SGK Base (PEK Base) | 3.577,50 |
| SGK Employee Premium (%7,5) | 268,31 |
| Unemployment Employee Premium (%0) | 0 |
| Income tax base | 3.309,19 |
| Income tax (%15) | 496,38 |
| Stamp duty base | 3.577,50 |
| Stamp duty | 27,15 |
| Net Fee | 2.785,66 |
| AGİ | 268,31 |
| Net Paid | 3.053,97 |
