What determines the taxation of salary is the nature of the payment, not its name. A bonus, a premium, a director’s fee, a benefit in kind or an expense allowance — whatever heading it is given, any benefit provided in return for service and capable of being expressed in money is salary. The mistake companies make most often is keeping a payment off payroll without noticing that breadth.
This page covers the scope of salary, the 2026 tariff and how the cumulative basis works, the exemptions with their current position, the exemption for salaries paid in foreign currency by an employer abroad, and the effect of residence and treaties.
The minimum living allowance was repealed at the beginning of 2022 and replaced by an exemption from income tax and stamp duty at minimum wage level. Material describing its calculation, with rates varying by marital status and number of children, is describing a system that ended four years ago.
The replacement works differently: the exemption removes the tax attributable to the minimum wage from every employee’s calculation and does not vary with family circumstances. Two employees on the same gross salary now receive the same net.
What Counts as Salary
Article 61 of the Income Tax Law defines salary as money and benefits in kind given to employees working for an employer and attached to a specified workplace in return for service, together with benefits capable of being expressed in money. The same article states expressly that the name given to the payment does not change its nature.
- Allowances, compensation payments and cash responsibility allowances
- Bonuses, premiums and performance-related payments
- Payments made under the name of advances or dues
- Amounts paid as expense allowances without documentation
- Payments determined as a percentage of profit
- Benefits provided in kind and capable of being valued
- Meal, transport and similar allowances above the exempt limit
- Indirect benefits such as private use of a company car
The most common error in practice is giving a payment the name of an expense allowance and keeping it off payroll. Reimbursing a documented expense actually incurred is not salary; but amounts paid as a round sum, regularly and without documentation, are.
The distinction turns on documentation and regularity. A fixed monthly transport allowance paid without receipts is salary whatever it is called, and is subject to withholding.
The 2026 Income Tax Tariff
| Bracket | Tax |
|---|---|
| Up to TRY 190,000 | 15% |
| For the first TRY 190,000 of TRY 400,000 | TRY 28,500, excess at 20% |
| For the first TRY 400,000 of TRY 1,500,000 | TRY 70,500, excess at 27% |
| For the first TRY 1,500,000 of TRY 5,300,000 | TRY 367,500, excess at 35% |
| Above TRY 5,300,000, on the first TRY 5,300,000 | TRY 1,697,500, excess at 40% |
This tariff applies to employment income. For income other than employment the third bracket ends at TRY 1,000,000, so the higher bands are reached earlier.
Tax is applied to the base accumulated since January rather than to each month separately. An employee whose gross salary never changes moves into a higher bracket part-way through the year, and take-home pay drops from that month on.
Where a net figure has been promised to an employee, the contract should state whether it is net for the whole year or net only at the start. On a full-year net commitment the employer absorbs the cost of the bracket movement, and that cost grows as the year progresses; the budget has to reflect it.
The Minimum Wage Exemption
The portion of an employee’s salary corresponding to the gross minimum wage is exempt from income tax and from stamp duty. The exemption applies to all employees; it is not limited to those earning the minimum wage.
The repealed minimum living allowance
- Mechanism
- An amount deducted from the tax calculated
- Variables
- Marital status and number of children
- Result
- Different net on the same gross
- Status
- Repealed at the beginning of 2022
The exemption in force
- Mechanism
- Tax attributable to the minimum wage is removed from the calculation
- Variables
- None
- Result
- Same net on the same gross
- Scope
- Everyone with employment income
The exemption applies to employment income only. Taxpayers with income from other sources who file a return cannot use it against that income.
Exempt Benefits
| Benefit | Scope and limit |
|---|---|
| Meals at the workplace | Meals provided by the employer at the workplace or its premises are exempt without a monetary limit |
| Meals provided externally | Where provided through meal cards or a third party, exempt up to the daily limit; the excess is treated as salary. The limit is updated annually |
| Transport | Assistance provided as a public transport card or ticket is exempt up to the daily limit. A transport allowance paid in cash is not within the exemption |
| Marriage and birth payments | Exempt up to two months’ salary of the employee; the excess is taxable |
| Child allowance | Exempt for up to two children and limited to the amount paid to civil servants |
| Accommodation | Accommodation provided up to the stated size is within the exemption; in general practice a rent payment is treated as salary |
| Work clothing and protective equipment | Items of a fixed-asset nature provided because the work requires them are not salary |
| Private health insurance and pension contributions | Premiums paid may be deducted from the base within the rate and amount limits in the legislation |
The daily limits for meals and transport, and the other monetary thresholds, are redetermined each year. Working with last year’s figures in January means the excess becomes salary and withholding is applied short.
The difference looks small but is multiplied by headcount and by months, and becomes an amount requiring correction at the year end.
Salaries Paid in Foreign Currency by an Employer Abroad
Article 23, paragraph 14 of the Income Tax Law provides an exemption for the salaries of those employed by non-resident employers. It is the question asked most often in structures with a liaison office in Turkey, or where staff are paid directly from abroad.
- The employer’s legal seat and business centre must not be in Turkey
- The salary must be paid out of earnings the employer obtained outside Turkey
- Payment must be made in foreign currency
- The salary must not be recorded as an expense in Turkey
- The employee’s service must be rendered to the non-resident employer
- Where any one condition fails, the exemption is lost entirely
- The exemption concerns income tax; social security is assessed separately
- Whether the arrangement creates a permanent establishment is a separate question
Where the salary appears as an expense in the records of a Turkish company or liaison office, the exemption falls away. Passing the cost to Turkey through an intra-group recharge produces the same result.
In a structure relying on this exemption, where the cost ends up therefore matters as much as which account the payment came from. The first place examined is the Turkish records.
Residence and Double Taxation Agreements
| Item | Position |
|---|---|
| Full liability | Those treated as resident in Turkey are taxed on their worldwide income |
| Residence test | Having a domicile in Turkey, or staying in Turkey continuously for more than six months in a calendar year |
| Temporary absences | Temporary absences do not interrupt the period of stay in Turkey |
| Limited liability | Those not treated as resident are taxed only on income derived in Turkey |
| Effect of treaties | Double taxation agreements may allocate taxing rights differently; the employment income article and the residence article are read together |
| Residence certificate | A certificate from the other country is required to rely on a treaty provision |
A foreign employee staying in Turkey for more than six months does not automatically mean their worldwide income is taxed here. Where a treaty applies, which country treats the person as resident is determined by the treaty’s own tests and the outcome can differ. That assessment belongs before the employee arrives.
Common Mistakes
- Still calculating the minimum living allowance. It was repealed at the beginning of 2022 and replaced by the minimum wage exemption.
- Keeping regular payments described as expense allowances off payroll. Undocumented round-sum payments are salary.
- Using last year’s meal and transport limits. The amounts are updated annually and the excess is treated as salary.
- Treating a cash transport allowance as exempt. The exemption covers assistance provided as a public transport card or ticket.
- Recharging the cost to Turkey under the foreign employer exemption. Expensing it in Turkey removes the exemption entirely.
- Extending the exemption to social security. It concerns income tax; insurance obligations are assessed separately.
- Treating the six-month rule as conclusive. Where a treaty applies, residence is determined by the treaty’s own tests.
- Promising a net salary without saying net for how long. The cumulative tariff makes the cost rise as the year progresses.
Frequently Asked Questions
What payments count as salary in Turkey?
Does the minimum living allowance still apply?
What are the 2026 income tax brackets for salaries?
Are meal and transport allowances exempt?
Is salary paid by an employer abroad exempt from Turkish income tax?
Does that exemption also cover social security premiums?
When does a foreign employee become fully liable to tax in Turkey?
Why does the cost of a net salary commitment rise during the year?
As the Ozbek CPA team, we advise on the taxation of salary in Turkey — assessing whether a payment counts as salary, structuring the benefits package against the exemption limits, meeting the conditions for the exemption on salaries paid in foreign currency by an employer abroad, assessing residence and treaty position for foreign employees, and modelling the annual cost of net salary commitments. See also our pages on payroll services, total employer costs, work permits and double taxation agreements. Contact us.
