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This chapter includes data on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by their employers. Results reported include the marginal and average tax burden for eight different family types.

Methodological information is available for personal income tax systems, compulsory social security contributions to schemes operated within the government sector, universal cash transfers as well as recent changes in the tax/benefit system. The methodology also includes the parameter values and tax equations underlying the data.

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The national currency unit is the “Türk Lirası” (TL). In 2019, TL 5.68 were equal to USD 1. In that year, the average worker earned TL 58 622 (Country estimate).

copy the linklink copied!1. Personal Income Tax Systems

1.1. Central government income tax

1.1.1. Tax unit

Spouses are taxed separately on earned income. This rule has been applied since 1 January 1999.

1.1.2. Tax allowances and tax credits Standard reliefs:

  • Reliefs for social security contributions: Employee's social security contributions are deductible from gross earnings. These contributions are 15% of gross income as stated by the Social Insurance Act. The contribution to the unemployment fund is included in this amount and equals 1% of gross income.

  • Contributions to public pension funds established by law are deductible.

  • Work related expenses: None.

  • Minimum Living Relief: The calculation of the minimum living allowance is based on the annual gross amount of the minimum wage for employees older than 16 at the beginning of the calendar year in which the income is obtained, multiplied by the following rates:

    • 50% for the taxpayer him or herself;

    • 10% for the spouse who neither works nor has an income;

    • 7.5% for each of the first two children;

    • 10% for third child;

    • 5% for each additional child.

This total amount is then multiplied by the rate (15%) which is applied to the first income bracket of PIT Schedule stated in Article 103 of PIT Law, and then minimum living relief is calculated by offsetting 1/12 of the allowance amount against monthly calculated tax due on employment income. Any excess is non-refundable.

According to Article 6 of Law No: 7103 (dated: 21.03.2018) when the net wages of minimum wage earners fall below the amount determined for the month of January of the current year because of moving into the second tax bracket (rate: 20%), minimum living relief will be increased by the same amount for the months when the net wage falls below net minimum wage determined for the month of January. Main non-standard tax reliefs applicable to an AW

  • Reliefs for disabled: Article 31 of PIT Law (implemented in 01.01.2004 by the law 4842) regulates tax relief for disabled persons. The employee who lost his/her working capacity with at least 80% is considered to be disabled in the 1st degree; employees are disabled in the 2nd respectively 3rd degree if they lost their working capacity with at least 60% respectively 40%. In these cases, the following amounts are deductible from monthly wages:

    • Disabled in the 1st degree: TL 1 200

    • Disabled in the 2nd degree: TL 650

    • Disabled in the 3rd degree: TL 290

  • Legal deductions for public institutions such as OYAK (Social Aid Institution for Military Officers).

  • 50% of the premiums paid by the wage-earner for life insurance policies which belong to himself (or herself), the spouse and dependent children and all of the premiums paid by the wage- earner for personal insurance policies including death, accident, health, illness, disablement, unemployment, maturity, birth, education, etc. provided that the insurance is contracted with a company establishment in or with a main office in Turkey. (The total amount of deductible premiums cannot exceed 15% of the wage that is earned in the current month. The annual amount cannot exceed the annual minimum wage.

  • Membership payments made to labour unions.

1.1.3. Tax schedule

The tax schedule in 2019 is as follows:

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Taxable income (TL)

Tax on lower threshold (TL)

Tax on excess amount above lower threshold (%)

Up to 18 000


18 000 up to 40 000

2 700


40 000 up to 148 000

7 100


Over 148 000

36 260


1.2. State and local income taxes

Income tax is levied only by the central government.

1.3. Stamp tax

The stamp tax base is gross earnings. The tax rate is 0.759% in 2019

copy the linklink copied!2. Compulsory Social Security Contributions to Schemes Operated within the Government Sector

2.1. Employees' contributions

2.1.1. Pensions (disability, old age and death insurance): 9%

2.1.2. Sickness: 5%

2.1.3. Unemployment: 1%

2.2. Employers’ contributions

2.2.1. Pensions (disability, old age and death insurance): 11%

2.2.2. Sickness: 7.5%

2.2.3. Unemployment: 2%

2.2.4. Pensions (for short term insurance branches): 2%

In order to increase employment and reduce regional imbalances in Turkey; various incentives policies have been implemented by state, by laws 4447, 4857, 5084, 5225, 5510, 5746, 6111, 6486 by Council of Minister’s Decree of 2012/3305 (Unemployment Law No: 4447, Labour Law No: 4857, Investment and Employment Promotion Law No: 5084, Investment Incentives and The Law of Cultural Initiatives Law No: 5225, Social Security General Health Insurance Law No: 5510, Promotion Research and Development Activities Law No: 5746, Law On The Restricting Of Certain Receivables and Amendment To The Law Of Social Insurance and General Health Insurance and Certain Other Laws And Decree Laws No: 6111, Amendment To The Law Of Social Insurance and General Health Insurance and Certain Other Laws No: 6486, Council of Minister’s Decree No: 2012/3305 on Government Subsidies for Investments, Law On Amendments To Tax Laws And Certain Other Laws And Decrees: 7103).

One of the various incentives is reduction of premiums. If disability, old age and death insurance premiums paid regularly by employers as stated law 5510 article of 81 (Social Security and General Health Insurance Law), 5% of total 11% premiums are paid by state on behalf of employers. (5% discount applied in employers share). In addition to 5% discount, 6% discount is implemented from 2013 in the working places located in 51 provinces, Gökçeada and Bozcaada determined by taking into account the social- development index.

With law no:7103 (dated:21.03.2018) Provisional Article 75 has been added to Social Security and General Health Insurance Law (Law no.5510). According to this article, the incentive (SSC Government support) application period has been extended to 2018 (January – September).

According to Council of Ministers Decree 2018/11668 (dated 20.06.2018) TL 100 (TL 3.33 per day) of Employers SSC will be covered by Government for employees whose daily gross earnings are below TL 120 in 2018.

According to Council of Ministers Decree 2018/11668 (dated 20.06.2018) TL 100 (TL 3.33 per day) of Employers SSC will be covered by Government for employees whose daily gross earnings are below TL 180 in private sector workplaces with collective bargaining agreements. There is no distinction by marital status or sex and the contributions apply to gross earnings. Compulsory social security contributions of employees and their employers are calculated according to the schemes presented above.

The Provisional Article 78 is added to Law No 5510 by the Law No 7162/10 issued in the Official Gazette on 30 January 2019. In workplaces with lower than 500 employees, for employees whose daily gross earnings are below TL102 (TL 203 in workplaces with collective bargaining agreements) TL 150 (TL 5 per day) of Employers SSC will be covered by Government in 2019. In workplaces with higher than 500 employees support amount will be TL 101 (TL 3.36 per day).

With law no: 7103 (dated: 21.03.2018) Provisional Article 19 has been added to Unemployment Law (Law no: 4447). Additional employment incentive is being implemented in order to increase the employment rate. This incentive’s objective group consists of unemployed persons who have no more than 10 insured days in last three months.

The incentive targets private sector and the amount of support will be calculated differently according to the sector in which the workplace operates. The incentive provides SSC support up to TL 2 558.40 (for employees with gross wages of TL 6 822.40) and income and stamp tax support of TL 153.74 for every additional employee in establishments operating in the manufacturing or information technologies sectors. For other sectors; the support is TL 959.40 for SSC premiums, and 153.74 TL for income and stamp tax (1 113.14 TL in total).

The support will be applied until December 2020 and benefiting period for each employee, consists of 12 months (if the insured is disabled, or if the insured is woman older than 18 years old or man between 18-25 years old, it is 18 months).

For employees whose gross earnings are below the base or above ceiling earnings, which are determined once in a year, these contribution rates are applied to the base or ceiling amounts respectively. In 2019, the base amount is approximately TL  30 701 and the ceiling amount is approximately TL 230 258. Under the Law No. 5510 (Social Security and General Health Insurance Law), the base wage for social security contributions is equal to the minimum wage. Because employees cannot be less than the minimum wage, the base wage is not considered in this publication. However, the ceiling earnings are considered for the purposes of this Report.

copy the linklink copied!3. Universal Cash Transfers

Employees obtain universal cash transfers according to the collective labour agreements that are signed between their employer and the labour union(s). These agreements vary with the bargaining power of the different parties in the different sectors in the economy. This explains why there is no standard amount reflecting these general transfers.

copy the linklink copied!4. Main Changes in Tax/Benefit System Since 2004

Personal Income Tax Law (No: 193) which is about income tax, Social Security and General Health Insurance Law (No: 5510) which is about social security contributions and Unemployment Insurance Law (No: 4447) which is about unemployment insurance fund are the main laws about tax/benefit system.

The main changes have been made to the following laws 5615, 6009, 6327 and 6645 which are as follows:

  • According to Act No: 5615, the new application “Minimum Living Relief” began to be implemented. (See the section 1.1.2).

  • According to Act No: 6009, the taxation of the wages are differentiated than the taxation of the other taxable revenue resources like trading income, income from immovable property or income from investments. By this way, it is ensured that wages (comparative to other income items) are later entered into the 3rd bracket on the income tax schedule.

  • According to Act No: 6327, (published in the Official Gazette issue 28338 on 29 June 2012) there are important amendments in the Private Pension System Regulations. According to this law, any citizen of the Republic of Turkey will have the right for state subsidy for his/her paid contributions to the Private Pension Account. The contribution upper limit to favour this incentive is the annual amount of minimum wage 25% of this amount shall be transferred to the account of the insured party as a state subsidy. The state subsidy shall be earned in proportion to the amount of time within the system.

  • According to Act No: 6645, “Minimum Living Relief” rate is changed from 5% to 10% which is used for third child’s rate.

copy the linklink copied!5. Memorandum Items

5.1. Identification of an AW

Weighted mean, by the number of employees, of the monthly average wage1 information obtained from ‘Structure of Earnings Survey, 2010’, published by TURKSTAT, according to NACE Rev.2 classification for B-N sections is calculated2 and B-N aggregated data is gained. (The annual average wage data is calculated by multiplying the monthly average wage values by 12).

The data from 2011-2017 is reached by using 2010=100 base year ‘Hourly Earnings Index’ and 2010 annual average wage data.

5.2. Contribution to private pension and health schemes

Business enterprises (employers) are permitted to make additional contributions for pension savings of their employees. However, these amounts of additional premiums are limited by main tax laws. Such additional pension arrangements, which are optional, are not widely used.

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2019 Parameter values

Average earnings/yr.


58 622

Country estimate



Income tax


0 .15

18 000

0 .20

40 000

0 .27

148 000

0 .35

Stamp tax


0 .00759

Employees SSC


0 .15


230 258




36 720

Employers SSC

Minimum living relief


0 .175


0 .15


0 .5


0 .1


0 .075


0 .1


0 .05


30 701

2018 Tax equations

The equations for the Turkish system are on an individual basis.

The functions which are used in the equations (Taper, MIN, Tax etc) are described in the technical note about tax equations. Variable names are defined in the table of parameters above, within the equations table, or are the standard variables “married” and “children”. A reference to a variable with the affix “_total” indicates the sum of the relevant variable values for the principal and spouse. And the affixes “_princ” and “_spouse” indicate the value for the principal and spouse, respectively. Equations for a single person are as shown for the principal, with “_spouse” values taken as 0.

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Line in country table and intermediate steps

Variable name












Credits in taxable income





CG taxable income




Stamp tax





CG tax before credits





Tax credits :





Children*child_allow;0)+IF(Children='3;(2*child_allow)' +(Children-2)*third_child_allow;0)+IF(Children>3;(2*child_allow) +(1*third_child_allow)+(1*add_child_allow);0))+IF(AND(earn<=min_wage;tax_inc>1st_inc_tax_thrsld);(tax_inc-1st_inc_tax_thrsld)*(2nd_inc_tax_rate-1st_inc_tax_rate);0)




CG tax





State and local taxes





Employees' soc security





Cash transfers





Employer's soc security




Key to range of equation B calculated separately for both principal earner and spouse P calculated for principal only (value taken as 0 for spouse calculation) J calculated once only on a joint basis.

*In the case where the spouse earns 33% of the average wage: Taxing Wages assumption on the working spouse earning 33% of the AW does not comply with the Turkish legislation. 33% of AW in Turkey is below the minimum wage and a person cannot be employed below minimum wage. According to the Turkish legislation, it is assumed that (because he/she doesn’t obtain “wage”) the spouse should not obtain income in the calculation for this case, and another minimum living allowance is not also calculated for the spouse. Minimum living allowance should be only calculated for the principle earner.


← 1. Monthly wage: Include the sum of monthly basic wages, over time payments, payments for shift work/night work and other regular payments paid to employees in November 2010 by employers.

← 2. The average wage amount from 2010 is calculated as a result of a joint working performed by authorities from TURKSTAT and Ministry of Finance.

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