Salary Taxation

In general terms, the article 32 of Turkish Labor Law defines the wage as:

“A monetary amount that is paid to a person by the employer or other third parties in return for their service.”

A more detailed definition of the wage is found in the article 61 of Income Tax Law No.193. This article defines the wage as:

“A certain amount of money that is subject to the employer and paid to employees in return for their service; and an interest provided by money and ayın, and can be represented by the money. Determination of the wage as a certain percentage of the earnings will not change the nature of the wage provided that the wage is paid as allowance, compensation, cash indemnity (financial liability indemnity), allocation, wage increase, advance, dues, daily allowance, premium, bonus, or for expenses or otherwise, but not paid in connection with a partnership.”


According to the article 32 of Turkish Labor Law, the wage has three components: (1) a wage must be paid for a task performed; (2) a wage must be paid by an employer or a third party; (3) a wage must be paid in cash.

For the purpose of the article 61 of Income Tax Law No.193, the components of the wage are defined as (1) being subject to an employer, (2) working in association with a specific business, and (3) receiving payment for any service rendered.


Any payments considered as a wage under the Income Tax law are subject to the income tax. In addition the wage, any other related income such as allowances, premiums, annual free gifts, gifts, indemnities and other incentive premiums is also subject to income tax.  

Taxable income is calculated by deducting certain permitted expenditures from the gross amount. According to articles 63 and 89(1) of Income Tax Law No.193, such deductions can be:

(1) a legal deduction based on various laws or regulations,

(2) a premium paid and contribution to the social security institution.

Additionally, the following aids are (in whole or in part) exempt from the income tax:

The benefit that is provided by the employer in the form of free meals at the workplace is exempt from the income tax. In case of no possibility for providing free meals at the workplace, the exemption from income tax shall be applied up to the daily limit set forth in the law where the food service is provided by a third party such as use of meal tickets (such limit is 14 TL exclusive of VAT in 2017 according to Income Tax Communique No. 287 2017). In the latter case (using a food provider), the employer must directly pay the price of meal to the Company providing the meal tickets.

The benefits that are paid to the employees by reason of marriage and birth are exempt from the income tax. Such exemption is limited to the two-month salary of an employee. An amount that exceeds such limit shall be subject to the income tax.  

“Any payment to the employees for child benefits is exempt from the income tax. Such exemption shall apply to two children maximum and be limited to the amount received by the public officers.  





According to article 23(14) of tax income law, the employees employed by limited companies whose head office and principal office are not located in Turkey shall be exempt from the income tax if:

1.        The wage is paid by the earnings and income produced outside,

2.        The wage is paid in a foreign currency, and

3.       The wage is not used in Turkey.

The income tax law (no. 193) differentiates between the limited tax liability and full tax liability. As a general rule, the resident taxpayers are subject to the full tax liability for their worldwide income. (Article 3) the non-resident taxpayers are taxed on the income they earn in Turkey. For the purpose of the income tax law, a resident taxpayer is someone who has a legal residence in Turkey and stays in Turkey more than six months successively within a calendar year. 


There is a tax-free minimum living allowance for the wage earners, being effective as of the 1st of January 2008. The income tax payable (taxable income) is calculated by deducting minimum living allowance from the income tax.

The calculation is based on the minimum wage regardless of the employee’s wage. The family structure and marital status of the employee are considered to calculate the minimum living allowance.

Calculation: 50% for the taxpayer, 10% for the unemployed spouse, 7.5% for each of first two dependent children and 5% for each subsequent dependent child.


The gross salary is the amount of salary earned by an employee according to Turkish Labor Law.

Gross Salary = Net Salary + Sum of Deductions (Social Security Premium contributed by employee (including unemployment insurance) + income tax + stamp tax)


The net salary is the amount of salary actually received by employees.

Net Salary = Gross Salary – Sum of Deductions


In addition to gross salary, the employer is obliged to pay the employer’s social security contribution and unemployment insurance premiums.

Total cost of the employee to the employer = gross salary + employer’s social security premium (including unemployment insurance)



A total of social security premiums is 37.5% of Earnings subject to Premium (including unemployment insurance). 15% of total is deducted from the gross salary as allowance of employee, and 22.5% of earnings subject to premium is additionally calculated as the employer’s allowance.  

The Social Security Institution’s floor and ceiling figures for 2017 are provided below:


Lower Limit

Upper Limit

01.01.2017- 31.12.2017

1.777,50 TL

13.331,40 TL



The wage earning of an employee is subject to the income tax and the employer is liable to deduct and pay it to the tax office on behalf of the employee.

Income Tax Base (taxable income) = Gross Salary – Social Security Premium (contributed by employee)

Income Tax = Taxable Income * Income Tax Rate (%)

Tariff used for taxing income subject to income tax

The tariff used for taxing income subject to income tax as set forth in the article 103 of Income Tax Law has been restructured to be used for taxing the income of 2017 calendar year.   

Up to 13.000 TL


1.950 for 13.000 TL of 30.000 TL, over


5.350 TL for 30.000 TL of 70.000 TL, (5.350 TL for 30.000 TL of 110.000 TL in case of wage earning), over 


16.150 TL for 70.000 TL of more than 70.000 TL (26.950 TL for 110.000 TL of more than 110.000 TL in case of wage earning), over




The stamp tax is calculated on the gross salary. The tax rate is 0.00759.

Stamp Tax = Gross Salary * Stamp Tax Rate



The amount of monthly wage declared to be paid to the foreigner by the employer must be in consistent with the duty and competency of such foreigner. Considering the amount of minimum wage in force as of the date of application, the wage payable to the foreigner must be at least:

1-      6.5 times the minimum wage for senior executives, pilots, and engineers and architects who request prior authorization;

2-      4 times the minimum wage for unit or branch managers and architects and engineers;

3-      3 times the minimum wage for those who do a job requiring expertise and skill, teachers and foreigners who work as a psychologist, physical therapist, musician and performing artist;

4-      Minimum wage for foreigners who perform domestic services, and 1.5 times the minimum wage for foreigners who perform a profession other than those listed above (such as salesperson, marketing – exportation officer);

5-      2 times the minimum wage for foreigners who work as an acrobat or similar employed by a tourism animation organization company, and who work as a masseur, masseuse and SPA therapist