The Act No. 7524 on Amendments to Tax Laws and Certain Laws, which also includes important regulations regarding employment and labour life, is being published in the Turkish Official Gazette dated August 2, 2024, and has entered into force.
With the aforementioned law, the Five-Point Social Insurance Premium Incentive coded “15510” (incentive given to employers employing EYT retirees) has been abolished as of September 2024.
This new regulation has increased Turkish employers’ labour costs. In this article, the increased amount of labour costs of Turkish employers due to abolishment of thethe Five-Point Social Insurance Premium Incentive coded “15510” is being explained.
As is known, with the Temporary Article 95 added to the Social Insurance and General Health Insurance Code No. 5510 by the Law No. 7438 dated 01.03.2023, a five-point premium discount was introduced for employers who prefer to keep on employing their employees after EYT Retirement who have become retired without being subject to age within the scope of the EYT Regulation made in 2023. If the relevant retirees continue to work in the same workplace subject to social security support premium the employer can be able to benefit from the premium incentive coded 15510 due to them. The regulation in question aimed to partially compensate the additional costs of employers arising from the EYT regulation of 2023. Likewise, the regulation in question aimed to ensure that individuals do not withdraw from business life after retirement, on the contrary, they continue to work as an extension of active employment policies.
However with the new regulation the mentioned premium incentive is being abolished. This provision has created an additional burden on employers’ labor costs. The additional cost to the employer will be vary between TRL 1,000.13 and TRL 7,500.94 depending on the amount reported to the social security office as to be between the minimum wage and the ceiling wage.
The difference premium amount to be paid according to the old and new regulations is as follows:
Additional cost to the employer after the last regulation for an insured person working at the Lower Limit of Earnings Subject to Insurance Premium (based on Gross Minimum Wage):
The amount of monthly premium debt that will increase per insured person if the 5-Point EYT incentive is not applied: TL 1,000.13
Additional cost to the employer after the last regulation for an insured person working at the Upper Limit of Earnings Subject to Insurance Premium (based on 7.5 times the Gross Minimum Wage):
The amount of monthly premium debt that will increase per insured person if the 5-Point EYT incentive is not applied: TL 7,500.94 (Fractions are rounded).
