Social Securıty System in Turkey
The Social Security Law regulates the social security rights of the workers, government oicials and self-employed persons and
covers the social risks such as
(i) work accidents and occupational illnesses,
(ii) healthcare,
(iii) child birth and child care,
(iv) disability,
(v) seniority,
(vi) death, and
(vii) unemployment.
The Social Security Institution is the relevant authority.
Contributions for Social Insurance and Taxes
The main inancing tool of the Turkish social insurance system is the contributions paid by employers and employees along with the state contribution.
Contribution of the employees is deducted from the salaries of the employees in speciied rates. Such premiums are paid both by employees and employers on behalf of employees to the Social Security Institution. Premium rates are determined in accordance with the type of risks the social security insurance covers. Social security premium rates are as follows:
|
TYPE OF RISK
|
EMPLOYEE’S SHARE
|
EMPLOYER’S SHARE
|
TOTAL
|
|---|---|---|---|
|
Short- term risk
|
–
|
%2
|
%2
|
|
Disability, penalty and death risks
|
%9
|
%11
|
%20
|
|
General Health Insurance
|
%5
|
%7,5
|
%12,5
|
|
Unemployment Insurance
|
%1
|
%2
|
%3
|
|
Total
|
%15
|
%22,5
|
%37,5
|
National Health Insurance
Under the Social Security Law, employees working with an employment agreement who reside in Turkey and foreigners with a residence permit (or work permit) if they do not have national health insurance in another country, and their dependents shall be subject to the general health insurance in Turkey. General health insurance is mandatory.
General health insurance provides the insured employees with
(i) protective healthcare;
(ii) healthcare in case of illness including medical examinations, blood and other tests and emergency healthcare; and
(iii) childbirth related healthcare. These healthcare services shall be provided by the public and private hospitals and medical institutions in agreement with the SSI within Turkey and abroad to the general health insurance holders.
State Pensions
Under Turkish law, there is a compulsory premium contribution for state pension in the amount of 20% along with the disability and death insurance. 9% of this is paid by the employee and 11% is paid by the employer.
The main beneit of the state pension is the retirement salary which employees are entitled to under certain conditions. In order to be entitled to retirement salary, the employee must reach a certain age and have to complete a certain number of working days which may vary depending on the date when they registered with the Social Security Institution for the irst time.
Moreover, automatic participation to the Turkish private pension scheme was introduced by a new law amendment entered into force on 1 January 2017. Accordingly, employers must pay 3% of their employees’ income on behalf of their employees in order to cover the private pension of them under the age of 45 and the Turkish State shall provide a one-time only additional subsidy per employee for participating in the private pension scheme.
Unemployment Benefits
Employees, (including foreign employees) whose compulsory unemployment insurance premiums have been paid, can beneit from unemployment insurance beneits. 1% of the unemployment insurance premiums are paid by the Turkish State itself, whereas the employer pays 2% and the employee pays 1%.
The main beneit of the unemployment insurance is the unemployment allowance. Unemployment allowance shall be payable conditional upon the criteria set forth under the Social Security Law being met. Accordingly, in order to be entitled to unemployment allowance, the employee’s employment agreement must be terminated/end in one of the following ways:
(i) the employer terminates the employment agreement by complying with the notice terms;
(ii) the employee or the employer terminates the employment agreement for a just cause without complying the notiication obligation;
(iii) if the employee works under a ixed term employment agreement, term of the agreement ends;
(iv) the employment agreement is terminated due to the transfer, closure or change in the characteristics of the workplace; or
(v) the employee becomes unemployed due to privatisation of his/her workplace.
The unemployment allowance is calculated by taking into account the salary which is the basis of the premiums and the allowance amount shall be 40% of the average gross daily salary calculated based on the last 4-month salary of the employee. Unemployment
allowance is paid for
(i) 180 days to employees who worked for 600 days,
(ii) 240 days to employees who worked for 900 days, and
(iii) 300 days to employees who worked for 1080 days at the end of the month following the date of entitlement to the allowance.