In order to increase employment and reduce regional imbalances in Turkey; various incentives policies have been implemented by state, by laws 4447, 4857, 5084, 5225, 5510, 5746, 6111, 6486 by Council of Minister’s Decree of 2012/3305 (Unemployment Law No: 4447, Labour Law No: 4857, Investment and Employment Promotion Law No: 5084, Investment Incentives and The Law of Cultural Initiatives Law No: 5225, Social Security General Health Insurance Law No: 5510, Promotion Research and Development Activities Law No: 5746, Law On The Restricting Of Certain Receivables and Amendment To The Law Of Social Insurance and General Health Insurance and Certain Other Laws And Decree Laws No: 6111, Amendment To The Law Of Social Insurance and General Health Insurance and Certain Other Laws No: 6486, Council of Minister’s Decree No: 2012/3305 on Government Subsidies for Investments, Law On Amendments To Tax Laws And Certain Other Laws And Decrees: 7103).
One of the various incentives is reduction of premiums. If disability, old age and death insurance premiums paid regularly by employers as stated law 5510 article of 81 (Social Security and General Health Insurance Law), 5% of total 11% premiums are paid by state on behalf of employers. (5% discount applied in employers share). In addition to 5% discount, 6% discount is implemented from 2013 in the working places located in 51 provinces, Gökçeada and Bozcaada determined by taking into account the social- development index.
With law no:7103 (dated:21.03.2018) Provisional Article 75 has been added to Social Security and General Health Insurance Law (Law no.5510). According to this article, the incentive (SSC Government support) application period has been extended to 2018 (January – September).
According to Council of Ministers Decree 2018/11668 (dated 20.06.2018) TL 100 (TL 3.33 per day) of Employers SSC will be covered by Government for employees whose daily gross earnings are below TL 120 in 2018.
According to Council of Ministers Decree 2018/11668 (dated 20.06.2018) TL 100 (TL 3.33 per day) of Employers SSC will be covered by Government for employees whose daily gross earnings are below TL 180 in private sector workplaces with collective bargaining agreements. There is no distinction by marital status or sex and the contributions apply to gross earnings. Compulsory social security contributions of employees and their employers are calculated according to the schemes presented above.
The Provisional Article 78 is added to Law No 5510 by the Law No 7162/10 issued in the Official Gazette on 30 January 2019. In workplaces with lower than 500 employees, for employees whose daily gross earnings are below TL102 (TL 203 in workplaces with collective bargaining agreements) TL 150 (TL 5 per day) of Employers SSC will be covered by Government in 2019. In workplaces with higher than 500 employees support amount will be TL 101 (TL 3.36 per day).
With law no: 7103 (dated: 21.03.2018) Provisional Article 19 has been added to Unemployment Law (Law no: 4447). Additional employment incentive is being implemented in order to increase the employment rate. This incentive’s objective group consists of unemployed persons who have no more than 10 insured days in last three months.
The incentive targets private sector and the amount of support will be calculated differently according to the sector in which the workplace operates. The incentive provides SSC support up to TL 2 558.40 (for employees with gross wages of TL 6 822.40) and income and stamp tax support of TL 153.74 for every additional employee in establishments operating in the manufacturing or information technologies sectors. For other sectors; the support is TL 959.40 for SSC premiums, and 153.74 TL for income and stamp tax (1 113.14 TL in total).
The support will be applied until December 2020 and benefiting period for each employee, consists of 12 months (if the insured is disabled, or if the insured is woman older than 18 years old or man between 18-25 years old, it is 18 months).
For employees whose gross earnings are below the base or above ceiling earnings, which are determined once in a year, these contribution rates are applied to the base or ceiling amounts respectively. In 2019, the base amount is approximately TL 30 701 and the ceiling amount is approximately TL 230 258. Under the Law No. 5510 (Social Security and General Health Insurance Law), the base wage for social security contributions is equal to the minimum wage. Because employees cannot be less than the minimum wage, the base wage is not considered in this publication. However, the ceiling earnings are considered for the purposes of this Report.
