The provisional increase in July went to income tax.

A new study prepared by the Research Center of the Confederation of Revolutionary Trade Unions (DİSK-AR) revealed that approximately one third of salaries goes to taxes and deductions.

‘How unfair taxes and deductions are eating up wages.’ In the titled investigation, it was stated that the interim salary increases in July were allocated to income tax; It was highlighted that employees were crushed by the weight of high inflation and unfair taxes and deductions on the other.

According to the investigation, the amount of income tax paid by an employee who paid approximately 1,300 TL in income tax in January 2023 increased to 3,500 TL in October 2023.

While the tax burden and deductions on wage earners was approximately 22 percent in January 2023, it increased to approximately 30 percent in August 2023.

CUT FROM 4 THOUSAND 350 TL INCREASED TO 7 THOUSAND 295 TL

The report notes that despite the tax exemption applied to the minimum wage portion of the salary, there were large declines in net wages, and says: “At the end of the year, approximately one-third of workers’ wages go to taxes and deductions.”

This situation was revealed below, with an example of a calculation carried out taking into account the payrolls of union members affiliated with DİSK:

“Suppose that an employee whose total gross salary and benefits in January 2023 is 20 thousand TL, receives a provisional increase of 25 percent in the second half of the year and his adjusted gross income in July 2023 is 25 thousand TL.

The total deduction of taxes and insurance premiums of the same employee (income tax, stamp tax, approximate unemployment insurance premium and SSI premium), which was 4 thousand 350 TL in January 2023, will be reduced to 5 thousand 100 TL in May 2023 and 6 thousand 378 in July 2023. TL and increased to 7 thousand 295 TL from October 2023.”

ONE WHO RECEIVED AN INTERMEDIATE INCREASE OF 25 PERCENT GOT AN INCREASE OF 12 PERCENT

Thus, while 22 percent of employees’ total income at the beginning of the year went to taxes and deductions and 78 percent of their gross salary remained, in October 2023 the deduction rate was approaching 30 percent ; The salary received by the employee decreased to 70 percent.

That is, while the worker’s gross salary was 20 thousand TL in January 2023, the net salary he received after deductions was 15 thousand 600 TL. In October, although the worker’s gross salary was 25,000 TL, the net salary he received was 17,500 TL. In other words, although this worker received a 25 percent interim raise in July, the net interim raise he received was limited to 12 percent due to taxes and deductions.

TOTAL CUT OF 69 THOUSAND TL IN ONE YEAR

The report also included other calculations based on this example, and revealed that a worker paid a total of 69 thousand TL in taxes and deductions (SGK premium, income tax, unemployment insurance premium and stamp tax) in 2023 , 27 thousand 575 TL of which was income tax.

The following declarations were made only with respect to the payment of income tax:

“While a worker paid 1,274 TL of income tax in January 2023, this amount increased to 2,240 TL in May 2023, 2,540 TL in July 2023 and 3,457 TL from October 2023. Thus, the increase in “The income tax deduction in October is 2.7 times compared to January.”

SSI PREMIUM SUPPORT OF TL 286 BILLION TO EMPLOYERS

While this is the case for workers, the report also drew attention to the bonuses given to employers.

“Since 2008, the budget covers 5 points of the employer portion of SSI premium. The five-point SSI premium support for employers, which was 3.8 billion Turkish lira in 2010, reached 69.3 billion Turkish lira in 2023,” the report says, adding the following statements:

“The burden of the 5-point premium discount for employers in the budget has exceeded 286 billion TL since 2010. However, the SSI 5-point premium support that applies to employers does not apply to Workers. “5 points of SSI premium support should apply to workers, as should employers, and 5 points of workers’ social security premiums should be covered by the Treasury/Budget.”

SO WHAT SHOULD YOU DO? HERE ARE DİSK-AR’S 5 SUGGESTIONS…

According to the report, there are three important reasons for the increase in employee income tax burden:

Income tax rates are very high, the minimum wage exemption is applied through an income tax deduction rather than the tax base, and income tax tariff brackets are kept low to allow employees to enter in the higher tariff band in a short time.

To alleviate the tax burden on employees, the following was suggested:

“*The first rate of income tax should be reduced to 10 percent for employees.

* Income tax tariff brackets should be increased according to the revaluation rate (no less than the increase in the minimum wage).

*The minimum wage exemption must be applied through a base deduction, not a tax deduction.

*The SSI 5-point premium support that applies to employers should also apply to employees.

* The old-fashioned stamp duty should be abolished.”