Turkey: Changes Have Been Made in Social Security Incentives and Contribution Percentages
Authors: Ipek Unlu Tik and A. Kaan Baser
Law number 7524 has been published in the Official Gazette, removing some incentives and increasing some of the social security contribution percentages.
Incentives
Retired employees in Turkey can continue to receive retirement pensions even if they start working after their retirement. However, the employers are required to pay social security support premiums for such employees.
Prior to the changes made in Social Security and General Health Insurance Law number 5510, employers were able to benefit from an incentive where 5 points of the employer’s social security support premium would be covered by the Treasury concerning employees who have resigned after 3 May 2023 due to retirement and rehired by the same employer within 30 days.
This incentive has been removed as of 9 January 2024 in accordance with the new Law number 7524. Accordingly, employers will no longer be able to benefit from a 5-point deduction incentive even if they rehire an employee within 30 days of their retirement.
Social Security Contributions
Employers are required to pay a certain percentage of the social security contributions under the name of “Short-Term Insurance,” which enables employees to benefit from general health insurance in cases of medical illness, maternity, workplace accidents and occupational illness.
The contribution amount has been increased to 2.25% (from 2%) of the employee’s earnings subject to social security premium, in accordance with the Law number 7524. Therefore, employers’ monthly expenditures have been slightly increased.
Key Points
- The Treasury will no longer provide a 5-point support on behalf of employers regarding the social security support premiums of employees who were retired and rehired by the same employer. Such an incentive has been removed.
- The Short-Term Insurance contribution percentage has been increased to 2.25% (from 2%) of the employees’ monthly earnings.
