Wage, tax system in Türkiye: A breakdown for employees
Man calculating expenses and managing financial documents, accessed on April 4, 2025. (Adobe Stock Photo)
After months of applications and interviews, you’ve finally received your first job offer in Türkiye. As you weigh the next steps and consider relocating, one of the first things to clarify is what your salary actually means—before and after deductions. Understanding how much of your income goes to taxes, what you’ll take home each month, and your legal rights as an employee is essential before signing a contract.
To offer a clear picture of how Türkiye’s wage and tax system works from both the employee and employer perspective, Türkiye Today consulted legal expert Erdi Eskioglu from Eskioglu and Zembilci Law Office, outlining the core legal and financial mechanisms behind employment income in Türkiye.
Defining gross and net salaries in Turkish law
Under Turkish labor law, wages are legally defined in two forms: gross salary and net salary. The gross salary refers to the total amount agreed upon between the employer and the employee before any statutory deductions are applied. This includes income tax, social security contributions, and other mandatory deductions. The net salary, on the other hand, is the amount the employee receives after subtracting all these deductions.
This distinction plays a central role in the financial relationship between employer and employee. It determines how income taxes and other obligations are calculated and directly affects the predictability of take-home pay for the employee and cost planning for the employer.
What is the impact of difference between gross and net salary?
The difference between gross and net salary extends beyond a basic numerical calculation. It also influences year-round income consistency and employer cost structures.
Employees who are paid a gross salary are subject to Türkiye’s progressive income tax system. As their cumulative income increases over the calendar year, they enter higher tax brackets, and a greater portion of their salary is taxed at higher rates. This causes their net take-home pay to decrease gradually toward the end of the year. The cycle resets with the beginning of the new year, when income accumulation restarts at zero.
To avoid year-end income volatility, some employees choose to negotiate their compensation in terms of net salary. This ensures a stable monthly income throughout the year, regardless of tax bracket changes. However, this places a heavier burden on employers, who must increase the gross salary toward the year’s end to maintain the agreed-upon net amount. In effect:
- The gross wage system leads to fluctuations in the employee’s income over time.
- The net wage system leads to increased costs for the employer, particularly during the higher-tax months of the year.
This dynamic makes salary structuring a key point of negotiation in Turkish employment contracts, particularly in long-term or high-income positions.
Last year’s income tax brackets for wage earners
As of 2024, Türkiye applies a progressive income tax model, where tax rates increase in line with total annual income. For employees receiving wages, the income tax is calculated based on the following brackets:
- 5% on income up to ₺110,000
- 20% on the portion above ₺110,000 and up to ₺230,000
(₺16,500 for the first ₺110,000, plus 20% of the remainder) - 27% on the portion above ₺230,000 and up to ₺870,000
(₺40,500 for the first ₺230,000, plus 27% of the remainder) - 35% on the portion above ₺870,000 and up to ₺3 million
(₺213,300 for the first ₺870,000, plus 35% of the remainder) - 40% on income exceeding ₺3 million
(₺958,800 for the first ₺3 million, plus 40% of the remainder)
These brackets apply specifically to wage income and are designed to offer a degree of tax relief to employees by delaying the impact of higher tax rates until income levels are relatively high.
In contrast, non-wage income—such as earnings from property rentals or capital gains—is subject to more aggressive tax thresholds. For example, the 27% tax rate begins at 580,000 TL for non-wage income sources. This differentiation reflects a policy objective of protecting salaried employees from heavy tax burdens while imposing stricter taxation on alternative income types.
Mandatory deductions from gross salary
Beyond income tax, there are additional statutory deductions that apply to an employee’s gross salary:
- Social Security Contributions (SGK):
- Employees are required to contribute 14% of their salary toward long-term insurance.
- An additional 1% is allocated for unemployment insurance.
- Stamp tax:
- A stamp tax of 0.759% is deducted from the gross wage.
These deductions are taken from the employee’s gross salary before the net salary is paid. It is important to note that these are not optional, and failure to deduct or remit them appropriately can lead to legal penalties for the employer.
Employer responsibilities and contributions
Employers in Türkiye have extensive obligations in connection with employee compensation. Their responsibilities include:
- Calculating all required deductions from the gross salary for each payroll period.
- Remitting taxes and contributions—including income tax, SGK, and unemployment insurance—to the relevant public institutions on a monthly basis.
- Paying the employer’s share of social security and unemployment insurance premiums, which are calculated based on the employee’s gross wage.
- Staying compliant with payroll laws and regulations, including timely reporting and documentation.
Employers may also access a variety of incentive schemes aimed at reducing the financial impact of these contributions. These programs are designed to promote formal employment and support specific sectors or demographics, such as youth employment or regional development.
Evaluation of the system
These regulations ensure the protection of employees’ social security rights and the fulfillment of employers’ legal obligations. Through the progressive income tax system, higher earners are taxed at higher rates to achieve fair distribution of financial responsibilities. The flexible tax brackets for wage income offer advantages to salaried employees, while stricter tax policies apply to other income types such as rental and investment income.
