What is payroll in Turkey and how is it prepared?
What is payroll in Turkey and how is gross-to-net salary calculated? SGK contributions, income tax, stamp tax and the employee payslip, explained simply.
From the moment a company in Turkey hires its first employee, a monthly routine begins: payroll. This article explains, in general terms, what a Turkish payroll is, which items it contains and how the monthly payroll cycle works step by step.
What is payroll?
The payroll (ücret bordrosu) is the record showing the wages an employer accrues for its employees in a given period (usually one month), the statutory and other deductions made from those wages and the net amount paid to each employee. The Turkish Tax Procedure Law (VUK) requires employers who pay wages to keep a payroll, and the payroll is also the main data source for SGK (social security) and tax filings.
In short, payroll is not just a “salary list”: it is an official record showing that the employer’s tax and social security obligations have been met correctly.
What does a payroll contain?
A Turkish payroll typically includes:
- Employee identity details, position and start date
- Days worked in the period and SGK premium days
- Gross wage and additional payments (overtime, bonuses, benefits)
- Employee SGK contribution and employee unemployment insurance contribution
- Income tax base, cumulative tax base and calculated income tax
- Stamp tax
- Exemptions applied and other deductions (advances, garnishments, private pension, etc.)
- Net amount payable
Gross to net: how is payroll calculated?
The logic is to start from the gross wage and subtract statutory deductions to reach the net wage. Because rates and thresholds can change every year, we deliberately give no figures here, only the order of the calculation.
Employee deductions
- Employee SGK contribution: Calculated on earnings subject to premium. The lower and upper limits of these earnings are set by legislation.
- Employee unemployment insurance contribution: Also calculated on earnings subject to premium.
- Income tax: The income tax base is the gross wage minus the employee SGK and unemployment contributions. Tax is calculated on a progressive scale applied to the cumulative base since the start of the year, so net pay can change during the year as the employee moves into a higher bracket.
- Stamp tax: Calculated on the gross wage.
- Minimum wage exemption: The portion of the wage corresponding to the minimum wage is exempt from income tax and stamp tax; the exemption is taken into account separately in the calculation.
Where applicable, deductions such as salary advances, court-ordered garnishments or the employee contribution to the automatic-enrolment private pension (BES) are also subtracted.
Employer cost
The net amount the employee receives is not the employer’s total cost. On top of the gross wage the employer pays the employer SGK contribution and the employer unemployment insurance contribution. Available SGK incentives can reduce this cost, which is why incentives should be reviewed regularly.
Monthly payroll steps
- Finalise time and attendance: Collect days worked, annual leave, sick leave, unpaid leave and overtime records.
- Process changes: Record hires, terminations, pay rises and bonuses during the month.
- Calculate gross and deductions: Run the gross-to-net calculation in the order above.
- Review and approve: Compare with the previous month and investigate unusual differences.
- Pay: Transfer net wages to employees.
- File: Tax and SGK data are reported through the withholding and premium service return.
- Archive: Keep the payroll, payslips and supporting documents in an orderly way.
Is the payslip the same as the payroll?
No. The payroll is the collective record of all employees’ wage calculations. The payslip (ücret hesap pusulası) is the individual document given to each employee showing how their wage was calculated. Turkish Labour Law No. 4857 requires employers to give employees a payslip with wage payments.
Common payroll mistakes
- Wrong day counts because time and attendance data arrives late or incomplete
- Incorrect carry-over of the cumulative income tax base on hires and terminations
- Incorrectly reported reasons for missing days
- Missing an SGK incentive the employer qualifies for
- Entering parameters updated at the start of the year (limits, exemptions) late
Outsourcing payroll
Payroll requires constant legislative monitoring, careful checks and confidentiality, so many companies hand it over to a specialist team. With our payroll calculation service, Turkuaz Payroll manages the cycle from attendance data to payslips, while filings are submitted by our contracted certified accountant (SMMM) partner.
Check current legislation: Contribution rates, the income tax scale, the minimum wage and premium earnings limits change periodically. This article intentionally contains no rates or amounts; before calculating, check the current rules published by SGK, the Revenue Administration (GİB) and the Official Gazette.
This article is for general information only and is not legal or tax advice. Rates, amounts and deadlines change; check the current legislation or consult a licensed accountant before acting.