What is payroll in Turkey and why does accuracy matter?
A payroll (bordro) shows an employee's gross earnings for a period, the statutory deductions from those earnings and the resulting net pay. In Turkey, a wage payroll includes contributions to SGK (Sosyal Güvenlik Kurumu, the Social Security Institution), unemployment insurance, income tax and stamp tax. The same payroll also determines the employer's contributions and total cost.
For foreign companies operating in Turkey, payroll often differs from what headquarters is used to: income tax is cumulative over the calendar year, a minimum wage exemption applies to every employee and monthly filings combine tax and social security in a single return. An inaccurate payroll affects more than net pay. Under-reported contributions and tax lead to penalties and late payment interest, while over-deduction damages employee trust. Because the statute of limitations for employee wage claims is 5 years, a mistake made today can become a claim years later.
This guide explains how a payroll is calculated with 2026 parameters. If you want to see the employer cost of a minimum wage employee in detail, read our minimum wage employer cost guide.
Which parameters are used in a Turkish payroll calculation?
Before calculating, make sure the year's parameters are set correctly. The key values for 2026 are:
| Parameter | 2026 value |
|---|---|
| Gross minimum wage | TRY 33,030.00 |
| Net minimum wage | TRY 28,075.50 |
| SGK contribution floor | TRY 33,030.00 |
| SGK contribution ceiling | TRY 297,270.00 |
| Employee SGK share | 14% |
| Employee unemployment insurance | 1% |
| Employer SGK share | 21.75%; with Treasury discount 19.75% outside manufacturing, 16.75% in manufacturing |
| Employer unemployment insurance | 2% |
| Stamp tax | 0.759% |
Income tax on wages is progressive and applied to the cumulative tax base: 15% up to TRY 190,000, 20% up to TRY 400,000, 27% up to TRY 1,500,000, 35% up to TRY 5,300,000 and 40% above. We cover how the brackets affect payroll in our Turkey income tax brackets 2026 guide. All current values are on our payroll parameters page.
How do you calculate gross to net pay in Turkey? 7 steps
1. Determine gross earnings
Gross earnings include monthly gross salary plus overtime, bonuses, premiums and cash benefits. If there are missing days in the month (unpaid leave, sick days, joining or leaving mid month), pay is prorated by days. Payroll therefore starts with day and hour data from the timesheet (puantaj).
2. Find earnings subject to contributions
Contribution earnings (prime esas kazanç) are the part of gross earnings subject to SGK contributions. They must fall between the floor and the ceiling. Some payments, such as meal allowances within certain limits, may be exempt from contributions; confirm the conditions in the current regulation.
3. Deduct employee SGK and unemployment shares
14% of contribution earnings is withheld as the employee SGK share and 1% as employee unemployment insurance.
4. Calculate the income tax base
Income tax base = gross earnings - employee SGK share - employee unemployment share. This base accumulates from January onwards.
5. Calculate income tax and deduct the exemption
The monthly base is taxed at the rate of the bracket the cumulative base falls into. If the monthly base spans two brackets, each part is taxed at its own rate. The minimum wage income tax exemption is then deducted. For 2026 the monthly exemption is TRY 4,211.33 from January to June, TRY 4,537.75 in July and TRY 5,615.10 from August to December.
6. Calculate stamp tax
Stamp tax (damga vergisi) is 0.759% of gross earnings. TRY 250.70 per month, the stamp tax on the minimum wage, is deducted as an exemption.
7. Find net pay
Net pay = gross earnings - employee SGK share - employee unemployment share - income tax payable - stamp tax payable. Any other deductions such as wage garnishments, advances or union dues are then applied.
Worked example: what is the net pay for a gross salary of TRY 60,000 in January?
| Item | Calculation | Amount |
|---|---|---|
| Gross pay | TRY 60,000.00 | |
| Employee SGK share | 60,000 x 14% | TRY 8,400.00 |
| Employee unemployment share | 60,000 x 1% | TRY 600.00 |
| Income tax base | 60,000 - 8,400 - 600 | TRY 51,000.00 |
| Calculated income tax | 51,000 x 15% | TRY 7,650.00 |
| Minimum wage income tax exemption | TRY 4,211.33 | |
| Income tax payable | 7,650 - 4,211.33 | TRY 3,438.67 |
| Stamp tax payable | 455.40 - 250.70 | TRY 204.70 |
| Net pay | TRY 47,356.63 | |
| Employer cost | 60,000 x 1.2175 | TRY 73,050.00 |
Employer cost adds the 19.75% employer SGK share for a non-manufacturing employer with the Treasury discount and the 2% employer unemployment share (21.75% in total). In manufacturing the 5 point discount gives 16.75% and a total cost of TRY 71,250.00; an employer without the discount pays 21.75% and the cost is TRY 74,250.00.
Why does net pay fall during the year in Turkey?
An employee on the same gross salary sees net pay change during the year because income tax is calculated on the cumulative base. When the cumulative base crosses a bracket threshold, the tax rate rises. The table below shows tax and net pay throughout 2026 for an employee on TRY 60,000 gross:
| Month | Cumulative base | Calculated income tax | Net pay |
|---|---|---|---|
| January to March | TRY 51,000 / 102,000 / 153,000 | TRY 7,650.00 | TRY 47,356.63 |
| April | TRY 204,000 (190,000 crossed) | TRY 8,350.00 | TRY 46,656.63 |
| May and June | TRY 255,000 / 306,000 | TRY 10,200.00 | TRY 44,806.63 |
| July | TRY 357,000 | TRY 10,200.00 | TRY 45,133.05 |
| August | TRY 408,000 (400,000 crossed) | TRY 10,760.00 | TRY 45,650.40 |
| September to December | TRY 459,000 and above | TRY 13,770.00 | TRY 42,640.40 |
In April, TRY 14,000 of the monthly base falls into the 20% bracket (37,000 x 15% + 14,000 x 20% = TRY 8,350). The small increase in net pay in July and August comes from the rising minimum wage exemption. This pattern is normal, and explaining it to employees in advance reduces payroll questions, especially from expatriate staff used to flat monthly withholding.
What is January net pay at different gross salaries?
| Item | Gross TRY 50,000 | Gross TRY 60,000 | Gross TRY 100,000 |
|---|---|---|---|
| Employee SGK share | TRY 7,000.00 | TRY 8,400.00 | TRY 14,000.00 |
| Employee unemployment share | TRY 500.00 | TRY 600.00 | TRY 1,000.00 |
| Income tax base | TRY 42,500.00 | TRY 51,000.00 | TRY 85,000.00 |
| Income tax payable | TRY 2,163.67 | TRY 3,438.67 | TRY 8,538.67 |
| Stamp tax payable | TRY 128.80 | TRY 204.70 | TRY 508.30 |
| Net pay | TRY 40,207.53 | TRY 47,356.63 | TRY 75,953.03 |
| Employer cost | TRY 60,875.00 | TRY 73,050.00 | TRY 121,750.00 |
These values are for January and assume the 19.75% employer SGK rate of a non-manufacturing employer. In manufacturing the rate is 16.75% after the 5 point discount, and employer cost is TRY 59,375.00, TRY 71,250.00 and TRY 118,750.00 respectively. For other months use the salary calculator, and for the employer side the employer cost calculator.
How are bonuses and benefits treated in payroll?
Bonuses and premiums paid in a month are added to gross earnings and go through the same steps as regular pay: SGK and unemployment shares are withheld, the amount is added to the income tax base and stamp tax applies. A large one off payment raises the cumulative base quickly and can push the employee into a higher bracket earlier in the year, so net pay in a bonus month may look lower than the employee expects.
If contribution earnings exceed the ceiling in a bonus month, no SGK contribution is calculated on the excess. In some cases the excess can be carried to later months; confirm the conditions in the current regulation.
The contribution and tax treatment of benefits such as meals, transport, private health insurance and private pension contributions depends on how they are paid and on specific limits. Benefits paid in cash are generally taxed like wages. Checking the exemption limits each year and setting them up as separate payroll items gives employees transparency and makes audits easier.
How do you calculate gross from net?
Many offers in Turkey are negotiated in net terms. Net to gross calculation works backwards through the steps above by iteration, because tax depends on the cumulative base. If net pay is kept fixed, gross pay may differ each month and employer cost rises during the year. Stating clearly in the employment contract whether pay is gross or net prevents disputes later in the year, a point many foreign employers learn the hard way.
How is payroll calculated when there are missing days?
For monthly paid employees a month counts as 30 days. If there is unpaid leave, sick leave, absence or a mid month start or exit, gross pay is prorated by the number of paid days. For example, an employee entitled to pay for 25 of 30 days receives 25/30 of monthly gross. The SGK floor and ceiling are also prorated by days: contribution earnings for an employee with missing days cannot be lower than the daily floor multiplied by the number of days.
The reason for missing days is reported to SGK with the relevant code in the monthly contribution and service document. Whether pay continues on sick days depends on the employment contract and any collective agreement; for unpaid sick days the employee may receive temporary incapacity allowance from SGK. Using the wrong code affects both incentive calculations and the employee's service record, so feeding payroll and timesheets from the same source matters.
What should a payslip in Turkey show?
The payslip (bordro pusulası) given to employees should show clearly how pay was calculated. It usually contains:
- Period, working days and any missing days with the reason.
- Gross pay and additional earnings such as overtime, premiums and bonuses.
- Employee SGK share, employee unemployment share and contribution earnings.
- Income tax base, cumulative base, calculated tax and the exemption applied.
- Stamp tax and its exemption.
- Other deductions (advances, garnishments, union dues) and the net amount paid.
Showing the cumulative base on the payslip helps employees understand mid year changes in net pay. Delivering payslips electronically also simplifies archiving.
What are common payroll mistakes in Turkey?
- Not starting the cumulative base for a mid year hire with the figure from the previous employer.
- Applying the same minimum wage exemption in every month.
- Entering overtime manually instead of from the timesheet, or forgetting that work beyond 45 hours a week is paid at a 50% premium.
- Calculating contributions on full gross pay when it exceeds the SGK ceiling.
- Reporting the reason for missing days to SGK with the wrong code.
- Forgetting to deduct the stamp tax exemption.
For overtime calculations see our overtime rules guide.
What should employers do at payroll close?
- Finalise the timesheet: days worked, leave, sick days and overtime hours.
- Process pay changes, new hires and exits for the period.
- Check additional payments and deductions (advances, garnishments, union dues).
- Run payroll and compare with the previous month.
- Send payslips to employees.
- File the MUHSGK return (muhtasar ve prim hizmet beyannamesi, the combined withholding tax and social security return) by the 26th of the following month and pay tax and contributions.
For the parameters to update at the start of a new year, see our new year payroll checklist.