Central Bank of Türkiye to consider 25% minimum wage hike in 2025 policy

Central Bank of Türkiye Governor Fatih Karahan indicated during meetings with investors in Washington that the 2025 monetary policy would account for the expected rise in the country’s minimum wage, sources familiar with the discussions revealed.

According to information from those present at the meeting, Karahan pointed out that an increase of roughly 25% in the minimum wage would align with Türkiye’s inflation projections for 2025. These insights, first reported by Bloomberg, stem from a private session held on Wednesday.

The commission responsible for determining the new minimum wage is set to conclude its work by December, with the final decision to be announced shortly afterward. The new figure will serve as a benchmark, not only for minimum wage workers but also for broader wage trends across various sectors.

While the focus from the economic administration has remained fixed on managing inflation, business circles have voiced concerns about tax policy. Erdal Bahcivan, the head of the Istanbul Chamber of Industry (ISO), recently urged for reforms to income tax thresholds and social security premium caps to ensure workers benefit from more equitable wages.

“To boost the net incomes of our employees, it’s essential to revisit income tax brackets and rates, as well as the upper limit on wages subject to premiums,” Bahcivan remarked. “The current tax system is becoming an increasing burden on workers. One of the most effective solutions, which has remained unresolved for many years, is to adjust the tax brackets — a move that would ease financial pressure and help account for inflation in workers’ pay.”

Bahcivan also stressed the urgency of this step ahead of the upcoming 2025 wage decisions, highlighting the importance of establishing a balanced and fair wage structure that would better support workers facing rising living costs.