Per the recent announcement in General Communiqué No. 311 issued by the Revenue Administration Directorate, the following guidelines pertain to the 2023 taxation of salary income in Turkey :
2023 Taxation and Declaration of Salary Income from Single or Multiple Employers in Turkey:
Taxed by Stoppage:
- If the total income of taxpayers receiving salary income from a single employer exceeds the threshold defined in the fourth income bracket (1,900,000 TRY for 2023) as specified in Article 103 of the tariff.
- If the total income of taxpayers receiving salary income from multiple employers surpasses the threshold in the fourth income bracket (1,900,000 TRY for 2023), inclusive of the income from the primary employer.
- If, for taxpayers receiving income from multiple employers, the total income from secondary employers exceeds the amount in the second income segment of the income tax tariff (150,000 TRY for 2023).
- When income is received from more than one employer, the employee can choose which income to consider as primary. The decision to declare salary income will be made internally, and if other incomes are present, they won’t be included in the calculation.
- If an annual declaration is required, expenses related to education, health, donations, and charities may be subject to deductions from the declared income. Taxes paid by stoppage can be deducted from the income tax calculated for the declaration.
- Salary income not subject to stoppage (excluding other salaries) will be declared according to Article 95 of the same Law, irrespective of their amounts.
Status of Employees with Multiple Employers in Private Sector Workplaces:
- An employee is considered to be receiving salary from more than one employer if:
- They earn salary income from another private employer or public institution/organization in addition to the wage received from a private sector employer during the year.
- They switch employers within the same calendar year while working with a private sector employer.
- They earn salary income while working alongside income or corporate taxpayers in the same calendar year when they start working in business partnerships or ordinary partnerships where taxpayers are involved.
- When salary income is received from multiple employers, it will be taxed separately, and the salary bases will not be linked. When changing employers, the new employer’s salary won’t be associated with the previous one, and a zero basis will be applied.
- Circumstances considered as receiving income from a single employer include mergers of private sector companies, changes in subcontractors in cases of principal employer-subcontractor relationships, and changes in shareholders in partnership-operating companies.
- Salaries received in the same calendar year (2023) are subject to cumulative taxation in Turkey.
- Employees in Turkey changing employers within a year can request cumulative taxation by notifying the new employer, taxes paid by stoppage can be deducted based on the cumulative basis calculated in the annual declaration (2023).
Status of Those Receiving Salary Income under Exceptions:
- Salaries paid to personnel working on ships and yachts registered in the Turkish International Ship Registry and salaries paid to R&D, design, and support personnel are exempt from income tax. There are no income tax deductions from these salaries.
- Income tax deducted from employees’ salaries working in Free Zones for R&D, design, and support roles is withheld by the employer and deducted from the tax accrued on the withholding declaration.
- Income tax exemptions in other laws follow a similar pattern.
Income Tax Tariff (For Salary Income Only):
- 15% for income up to 70,000 TRY
- 10,500 TRY for income between 70,000 TRY and 150,000 TRY, with a 20% surplus rate
- 26,500 TRY for income between 150,000 TRY and 370,000 TRY, with a 27% surplus rate
- 85,900 TRY for income between 370,000 TRY and 1,900,000 TRY, with a 35% surplus rate
- 621,400 TRY for income over 1,900,000 TRY, with a 40% surplus rate
For further details, you can refer to Revenue Administration’s Communiqué No. 311 by following this link.
San Global is well-equipped to assist you with your Employer of Record (EOR) and payroll requirements (also known as the Umbrella Company) in Turkey. We are capable of handling your HR (Recruitment) needs, even in the absence of a legal entity in Turkey.