Why is January payroll risky every year in Turkey?
Most of the parameters that drive payroll in Turkey change at the start of the year. The minimum wage, the floor and ceiling for SGK (Sosyal Güvenlik Kurumu, the Social Security Institution) contributions, the income tax bracket thresholds, the minimum wage tax exemptions and the severance pay cap are all updated around the same time. If one of these values is missing or updated late, January payroll is wrong and the error carries into later months, because income tax is based on a cumulative base.
Some values are officially announced only at the end of December or even during January. For foreign companies with a Turkish entity, this timing often clashes with group year end close. Having preparation finished while waiting for the announcements speeds up January close. This guide lists the parameters to check, where to confirm them and the order in which to update them.
Note: 2027 parameters had not been announced when this guide was written. No figures are given for the new year below; the tables show 2026 values as a reference for comparison. Confirm the new values from official sources once they are published and enter them in your system. You can also follow announced values on our payroll parameters page.
Which payroll parameters change at the start of the year?
The table below shows the parameters to check in January with their 2026 reference values. Compare new year values with this table as official announcements are published.
| Parameter | 2026 reference value | Source to check for the new year |
|---|---|---|
| Gross minimum wage | TRY 33,030.00 | Minimum Wage Determination Commission decision, Official Gazette (Resmî Gazete) |
| Net minimum wage | TRY 28,075.50 | Calculated from the gross amount |
| SGK contribution floor | TRY 33,030.00 | SGK circular or announcement |
| SGK contribution ceiling | TRY 297,270.00 | SGK circular or announcement |
| Income tax bracket thresholds | TRY 190,000 / 400,000 / 1,500,000 / 5,300,000 | Revenue Administration (Gelir İdaresi Başkanlığı) communiqué |
| Income tax rates | 15% / 20% / 27% / 35% / 40% | Income Tax Law |
| Monthly income tax exemption (January) | TRY 4,211.33 | Calculated from the new minimum wage |
| Monthly stamp tax exemption | TRY 250.70 | Calculated from the new minimum wage |
| Stamp tax rate | 0.759% | Stamp Tax Law schedule |
| Severance pay cap | TRY 73,729.87 | Ministry of Treasury and Finance civil servant coefficient circular |
| SGK employee / employer rates | 14% + 1% / 21.75% (with Treasury discount 19.75% outside manufacturing, 16.75% in manufacturing) + 2% | Law No. 5510 and SGK announcements |
The severance pay cap is updated twice a year, in January and July; most other values are annual. If the minimum wage receives a mid year increase, the floor, ceiling and exemptions are recalculated as well.
What should you check when the minimum wage is announced?
The minimum wage affects more payroll parameters than any other value. When the new amount is announced, update the following together:
- Enter the gross minimum wage with the correct effective date.
- Raise all gross pay below the new amount.
- Set the SGK contribution floor equal to the new gross minimum wage.
- Redefine the SGK ceiling using the coefficient given in the announcement.
- Recalculate the minimum wage income tax exemption month by month; it rises as the minimum wage's cumulative base moves into higher brackets.
- Update the stamp tax exemption as the new gross minimum wage x 0.759%.
- Update benefits linked to the minimum wage, such as payments defined as a percentage of it.
We cover the effect on employer cost in our minimum wage employer cost guide and the HR impact in our 2027 minimum wage HR impact guide.
What should you do when income tax brackets change?
Income tax bracket thresholds are updated every year based on the revaluation rate and are usually announced in December by communiqué. The new brackets apply from January payroll, and the previous year's cumulative base resets.
- Set the four thresholds and five rates according to the new communiqué.
- Confirm that every employee's cumulative income tax base starts from zero in January.
- Make sure no base carries over from the previous year; payments made in January for December must be processed in the year they belong to.
- Review the process for collecting the cumulative base from previous employers for mid year hires.
See month by month examples in our Turkey income tax brackets 2026 guide.
What does a January payroll look like with 2026 values?
So that you can compare once new values are announced, here are reference examples from January 2026 payroll. After entering the new parameters, run a test payroll with the same gross amounts and check that differences move in the expected direction.
| Item (January 2026) | Minimum wage | Gross TRY 60,000 | Gross TRY 100,000 |
|---|---|---|---|
| Employee SGK share | TRY 4,624.20 | TRY 8,400.00 | TRY 14,000.00 |
| Employee unemployment share | TRY 330.30 | TRY 600.00 | TRY 1,000.00 |
| Income tax payable | TRY 0.00 | TRY 3,438.67 | TRY 8,538.67 |
| Stamp tax payable | TRY 0.00 | TRY 204.70 | TRY 508.30 |
| Net pay | TRY 28,075.50 | TRY 47,356.63 | TRY 75,953.03 |
| Employer cost (non-manufacturing, 21.75%) | TRY 40,214.03 | TRY 73,050.00 | TRY 121,750.00 |
The employer cost row assumes a non-manufacturing employer paying 19.75% employer SGK after the Treasury discount plus 2% unemployment insurance. In manufacturing the 5 point discount gives 16.75%, and total cost is TRY 39,223.13, TRY 71,250.00 and TRY 118,750.00 respectively. In the test run, check in particular: are income tax and stamp tax zero for the minimum wage employee, is the correct exemption deducted for higher earners, and are contributions capped at the ceiling for pay above it? For the calculation steps see our guide to calculating payroll in Turkey.
Why check the severance pay cap in January?
Severance pay (kıdem tazminatı) is calculated as 30 days of gross pay for each full year of service and is capped. The cap is updated in January and July; the 2026 value used as a reference in this guide is TRY 73,729.87. Severance for employees leaving around the turn of the year is calculated with the cap in force on the exit date. If there are exits in January, do not calculate before entering the new cap.
- Enter the new cap with its effective date.
- For exits at the end of December and the start of January, apply the cap based on the exit date.
- If you book a severance provision, update it with the new cap.
Use the severance pay calculator for example calculations.
What should employers do about SGK incentives in January?
The Treasury discount (Hazine indirimi), minimum wage support and several employment incentives depend on annual regulations. An incentive may expire in December or its conditions may change in the new year. Before the first payroll of the year, check current conditions in the latest SGK announcement.
- List the incentives you apply and check the end date of each.
- Confirm from the official announcement whether minimum wage support continues in the new year; do not add it to the budget before the announcement.
- Revalidate Treasury discount conditions (no overdue debt, timely filing and payment) for the new year. In 2026 the Treasury discount is 5 points in manufacturing (employers pay 16.75%) and 2 points outside manufacturing (employers pay 19.75%); employers that do not qualify pay 21.75%. Confirm the rate for your sector and the new year in the SGK announcement.
- Update hire dates and eligibility periods for employees covered by incentives.
How should annual leave balances be checked at year start?
In Turkey, annual leave entitlement arises on the employee's hire anniversary, not the calendar year. Still, many companies review leave balances at year start. Check that employees reaching 5 or 15 years of service have moved from 14 to 20 days or from 20 to 26 days, that employees aged 18 or under and 50 or over have at least 20 days, and that carry over of unused leave follows company policy. See our annual leave guide for employers for details.
What should be prepared in December?
A smooth January close depends largely on December preparation. Even before new values are announced, you can: finalise year end leave balances and carry over days, close out unpaid premiums and overtime, plan exit dates and severance calculations for leavers, and submit pay increase proposals for approval. On the day parameters are announced, only data entry and a test run should remain.
Complete checklist before January payroll
- December payroll closed and the MUHSGK return (muhtasar ve prim hizmet beyannamesi, the combined withholding tax and social security return) filed by the 26th of the following month.
- Previous year's cumulative bases archived and reset for the new year.
- New gross minimum wage and effective date entered.
- SGK contribution floor and ceiling updated.
- Income tax bracket thresholds entered per the new communiqué.
- Monthly minimum wage income tax exemption table recalculated.
- Stamp tax exemption recalculated from the new minimum wage.
- Severance pay cap updated.
- Pay below the minimum wage corrected.
- Benefits linked to the minimum wage updated.
- Incentive conditions and periods compared with the latest SGK announcement.
- Annual pay increases entered and approved.
- Test payroll run and compared with the previous December.
- Employees informed about net pay changes for the new year.
How should annual pay increases be reflected in payroll?
Many companies apply pay increases in January. Once rates are approved, enter them with their effective date and check them before running payroll. For increases agreed in net terms, remember that gross pay may differ each month: as the cumulative base rises, more gross is needed to keep the same net. Reviewing increase decisions together with salary bands and budget reduces cost surprises later in the year.
What are common mistakes at January close?
Running payroll with last year's parameters
When official values come late, payroll teams sometimes calculate with old parameters and correct later. This creates difference payrolls, amended returns and employee questions. Where possible, wait for the new values before finalising January payroll.
Updating the exemption table only for January
The minimum wage income tax exemption changes during the year. Entering only the January amount and not the other months leads to wrong net pay for higher earners in the summer.
Mixing up items paid in December but belonging to January
The period a bonus, premium or overtime payment belongs to determines the cumulative base and tax bracket. Do not pay before the period is clear.