Payroll in Turkey is not a calculation problem. The arithmetic is fixed by legislation and does the same thing every month; what costs employers money is filing late, paying by the wrong method, missing a parameter that changed at the turn of the year, or applying a relief that no longer exists.
This page sets out the 2026 parameters, how gross becomes net, what the employer actually pays on top, the monthly cycle and its deadlines, and the entitlements that arise on termination.
The minimum living allowance was abolished at the beginning of 2022, when the exemption on income and stamp duty at minimum wage level was introduced in its place. Payroll material that still lists its calculation is describing a system that ended four years ago.
The replacement works differently and the difference matters. The allowance was an amount added to net pay and varied with marital status and number of children. The exemption instead removes the income tax and stamp duty attributable to the minimum wage from every employee’s calculation, whatever they earn and whatever their family circumstances. Two employees on the same gross salary now receive the same net.
From Gross to Net
The order is fixed. Each step operates on the output of the one before it, which is why applying them in a different sequence produces a different and wrong answer.
| Step | Basis | 2026 |
|---|---|---|
| Gross salary | The contractual monthly amount, including benefits treated as salary | Floor TRY 33,030 |
| Employee social security | On earnings subject to premium, up to the ceiling | 14% |
| Employee unemployment insurance | On the same base | 1% |
| Income tax base | Gross less the employee’s social security and unemployment deductions | — |
| Income tax | Cumulative progressive tariff across the year | 15% – 40% |
| Stamp duty | On the gross amount | 0.759% |
| Minimum wage exemption | The income tax and stamp duty attributable to the gross minimum wage are deducted from the amounts calculated | Applies to all |
| Net salary | Gross less the deductions above, after the exemption | Floor TRY 28,075.50 |
Income tax is applied to the cumulative base built up since January, not to each month separately. An employee whose gross salary never changes therefore moves into a higher bracket part-way through the year, and net pay drops from that month on.
This is the most frequent payroll question employers receive and it is not an error. Where an employee has been promised a net figure, the contract has to say whether it is net for the whole year — in which case the employer absorbs the bracket movement — or net at the start, in which case the employee’s take-home changes. Leaving that unstated is where the dispute comes from.
What the Employer Pays on Top
| Item | Basis | Rate |
|---|---|---|
| Employer’s social security | On earnings subject to premium, up to the ceiling | 20.75% |
| Employer’s unemployment insurance | On the same base | 2% |
| Total, standard | Before any reduction | 22.75% |
| Five point reduction | For employers meeting the conditions, including having no overdue premium debt | 17.75% |
| Severance provision | Accrues from the first year of service and is a real cost, not a contingency | Roughly one month per year |
| Annual leave provision | The monetary value of leave accrued but not taken | From 14 days |
| Benefits above the exemption | Meals, transport and similar; the portion above the exempt amount is treated as salary and grossed up | Varies |
The ceiling on earnings subject to premium was raised from 7.5 times the gross minimum wage to 9 times. For 2026 that puts it at TRY 297,270.
The effect falls entirely on higher-paid staff. An employee whose salary sat above the old ceiling now attracts premiums on a materially larger base, and the employer cost rises even though the salary has not changed. Budgets built on the previous multiple understate the 2026 cost of senior employees.
The Monthly Cycle
- Collect the month’s variable dataOvertime, absence, unpaid leave, sick leave reports, bonuses, benefit changes, joiners and leavers. The cut-off date should be fixed and respected, because late data is the main cause of corrective filings.
- Calculate and reconcileGross to net for each employee, the cumulative income tax base carried forward, and reconciliation against the previous month to explain every movement.
- ApproveThe payroll is approved by the employer before payment. Approval means the totals and the exceptions have been reviewed, not that the file was received.
- Pay through the bankWhere the workplace employs five or more, wages, bonuses and all payments of that nature must be made through a bank. Cash payment at that size is a breach carrying an administrative fine, and it also weakens the employer’s position in any later wage dispute.
- File the returnThe withholding and premium service return covers income tax withholding, stamp duty and social security in a single filing, due by the 26th of the following month.
- Pay the liabilities and distribute payslipsTax and premium payments settled by their due dates, and payslips issued to employees. The payslip is the employee’s evidence of what was paid and on what basis.
Payment through a bank. At workplaces with five or more employees, wages and similar payments must be made through a bank. This is examined on inspection and the fine is applied per employee per month.
Notifying entry before work begins. The social security entry notification must be made before the employee starts, not on the first day or afterwards. An employee found working without it creates exposure well beyond the fine, because the start date then becomes a matter of assertion rather than record.
Leave, Notice and Severance
| Entitlement | Basis | Amount |
|---|---|---|
| Annual leave, 1–5 years | After completing one year of service | 14 days minimum |
| Annual leave, 5–15 years | By length of service | 20 days minimum |
| Annual leave, over 15 years | By length of service | 26 days minimum |
| Notice, under 6 months | By length of service | 2 weeks |
| Notice, 6 months to 1.5 years | By length of service | 4 weeks |
| Notice, 1.5 to 3 years | By length of service | 6 weeks |
| Notice, over 3 years | By length of service | 8 weeks |
| Severance | Thirty days’ gross pay per year of service, on the all-inclusive gross wage | Capped at TRY 73,729.87 |
Two points are regularly got wrong in opposite directions. The base is the all-inclusive gross wage, which includes benefits provided on a continuing basis — meals, transport, fuel, regular bonuses — not the bare contractual salary. Employers who provision on salary alone under-provide.
At the same time the amount payable for each year of service is capped, and the ceiling is updated every January and July. For 1 July to 31 December 2026 it is TRY 73,729.87; TRY 64,948.77 applied in the first half. Employers who provision without the cap over-provide for senior staff. Both errors are avoidable by calculating the figure properly once and updating it twice a year.
Foreign Employees
- A work permit is required before employment begins and is a separate process from payroll
- The permit takes the place of a residence permit
- Payroll operates under the same rules once the person is employed
- Residence for tax purposes turns on domicile or a continuous stay exceeding six months in a calendar year
- A double taxation agreement may allocate taxing rights differently; the treaty position is checked rather than assumed
- Where the person comes on assignment from a country with a social security agreement, a certificate of coverage may keep them insured at home
- That certificate must be obtained before the assignment begins
- The salary criterion in the permit assessment must actually be applied through payroll, and is examined on renewal
Common Mistakes
- Still calculating the minimum living allowance. It was abolished at the beginning of 2022 and replaced by the minimum wage exemption.
- Using last year’s parameters in January. The minimum wage, the premium ceiling, the tax brackets and the exempt benefit amounts all change at the turn of the year.
- Budgeting the premium ceiling at the old multiple. It rose from 7.5 to 9 times the minimum wage, and the whole effect falls on higher-paid staff.
- Promising a net salary without saying net for how long. The cumulative tariff moves the employee into a higher bracket during the year; who absorbs that has to be agreed in writing.
- Paying wages in cash at a workplace with five or more employees. Payment through a bank is compulsory and the fine is applied per employee per month.
- Notifying social security entry on or after the first day. The notification must precede the start of work.
- Provisioning severance on the bare salary. The base is the all-inclusive gross wage and includes continuing benefits.
- Ignoring the severance ceiling. It is updated in January and July, and provisioning without it overstates the liability for senior staff.
Frequently Asked Questions
What is the minimum wage in Turkey for 2026?
Does the minimum living allowance still apply?
What are the social security rates?
What is the ceiling on earnings subject to premium in 2026?
Why does an employee’s net pay fall during the year?
Must wages be paid through a bank?
When is the monthly payroll return filed?
How is severance calculated?
As the Ozbek CPA team, we run payroll for companies in Turkey — monthly gross to net calculation and reconciliation, social security entry and exit notifications, the withholding and premium service return, bank payment lists and payslips, leave and severance provisioning, and payroll for foreign employees alongside the work permit process. We also review existing payrolls where a company wants the parameters and provisions checked against current legislation before an audit or a transaction. See also our pages on employer of record, work permits, salary taxation and total employer costs. Contact us.
