There is a payroll tax in Turkey so that companies can finance social and employer contributions. Social security contributions due on wages are divided into two categories: employer contributions and employee contributions. In some cases, you may be exempt from employer contributions, but very rarely from employee contributions. Update on these two types of compulsory contributions.
Payroll tax in Turkey : Employee and employer contributions, the same objective, different calculation methods
Social contributions, whether employee or employer, are due on the wages paid to employees of your company. They finance basic social cover for employees. These are the social benefits linked to insurance:
accidents at work and occupational diseases,
Payroll tax in Turkey : Employee social security contributions
This is the share of social security contributions payable by the employee and deducted from his salary. It is therefore the part of the contributions that the employee pays. They represent on average 13% of the gross salary. They are deducted from the gross salary paid to the employee.
It is in fact the company itself which pays the contributions on behalf of its employees, to the collecting bodies, the funds such as the SGK.
Payroll tax in Turkey : Employer social security contributions
This is the share of social contributions payable by the employer and which is added to the cost of the gross salary of the employee. They are calculated on the gross salary paid to employees. Their amount is generally higher than the employee social security contributions.
When you assess the cost of recruitment for your company, you must therefore take into account the gross salary paid to employees and employer contributions.
Count between 20 and 30% of the gross salary. This gross salary, plus employer contributions, is sometimes called “charged salary” or “super gross salary”.
Example of calculation of employee and employer social security contributions:
For a net salary of 7,093.18 TRY:
Payroll costs amount to 14% of gross salary. Here, 1.213,32 TRY. The gross salary therefore costs the company 8.606,66 TRY.
Employer social charges amount to 20% of gross salary (8.606,66 TRY). In our example, the amount is 1.819,97 TRY (unemployment prim employer 161,78 TRY + social security employer 1.658,19 TRY).
The advice of our accountants to reduce your employer contributions in Turkey
The first thing to do to reduce the amount of your social contributions is to use all the peripheral methods of remuneration: restaurant tickets, profit-sharing, benefits in kind, holiday vouchers, etc.
Then, it is possible to change the tax and social status of the manager (depending on the level of his remuneration, his age and his remuneration strategy).
If you think you are paying too much employer contributions, contact an accountant who can advise you.