The Social Insurance and General Health Insurance Code No. 5510, which is the fundamental law of the Turkish Social Security Regime, details which employees must be socially insured, the premiums to be paid on behalf of employees, and the assistances and services to be provided to employees.
In this regard, the provisions of the Article 80 of Code No. 5510 are applied regarding which wages and earnings of employees will be reported to the Social Security Institution (SSI) and from which social insurance premiums will be deducted. The premiums to be calculated from the monthly earnings of the insured is required to be declared to the SSI as 26th of the next month at the latest.
The first of the two basic elements in the calculation of earnings subject to premium is “earned wages”. The earnings of insured individuals from which premiums will be deducted are calculated based on the gross total of payments such as earned wages, premiums, and bonuses. It is not necessary for wages to be paid, but it is sufficient for them to be accrued to be included in the scope of the obligation to deduct premiums. On the other hand, in order for premiums, bonuses, and all kinds of entitlements of this nature to be subject to earnings subject to premium, they must have been paid within the relevant month.
As a second element of earnings subjected to social insurance premium, payments made by employers to private health insurance and individual retirement systems on behalf of employees are also taken into account in determining the amount to be deducted as premium.
Payments in the nature of above mentioned items that are made to insured individuals within that month, in-line with the decisions made by the administration or judicial authorities, should also be included in the earnings subject to insurance premium and to be declared to the SSI.
Amounts Exempted from Earnings Subject to Premium
On the other hand, the Article 80 of Law No. 5510 also stipulates some exceptions for earnings to be subjected to the SSI. Accordingly, payments such as in-kind benefits, birth, death and marriage benefits provided by employers are not subject to income subject to premium.
In addition, private health insurance premiums and individual retirement contributions whose monthly total does not exceed 30% of the minimum wage also benefit from the exemption.
As a general rule, wages are attributed to the month in which they are earned. Other payments are included in the income of the month in which they are paid.
In premium calculations, if no wages are received for days not worked, daily earnings are determined by dividing them by the number of days worked.
For insured individuals with part-time employment contracts, the number of days of premium payment is calculated according to the length of employment.
For those receiving additional tuition fees (in the nature of wage) in institutions affiliated with the Ministry of National Education, the number of days of premium payment is calculated by dividing the gross additional tuition fee by the daily earnings lower limit.
In sum, the provisions of the Article 80 of Code No. 5510 are applied regarding which wages and earnings of employees will be reported to the Social Security Institution (SSI) and from which social insurance premiums will be deducted. The above mentioned rules provide a general framework on how the premium-based earnings of insured individuals are calculated in the Turkish Social Security System, which payments are included, and which exceptions are available.
