Income Tax Regulations for Employees in Türkiye for 2025
Türkiye’s income tax regulations for employees in 2025 have been established based on Article 103 of the Income Tax Law. Entrepreneurs and investors looking to do business in Türkiye should be aware of these tax brackets and related incentives.
Income Tax Brackets
The income tax brackets for 2025 are divided into two categories: wage income and non-wage income.
Wage Income
- up to 158,000 TL: 15% tax rate applies
- for income over 158,000 TL up to 330,000 TL: 23,700 TL on the first 158,000 TL, plus 20% on the excess
- for income over 330,000 TL up to 1,200,000 TL: 58,100 TL on the first 330,000 TL, plus 27% on the excess
- for income over 1,200,000 TL up to 4,300,000 TL: 293,000 TL on the first 1,200,000 TL, plus 35% on the excess
- for income over 4,300,000 TL: 1,378,000 TL on the first 4,300,000 TL, plus 40% on the excess
Non-Wage Income
- up to 158,000 TL: 15% tax rate applies
- for income over 158,000 TL up to 330,000 TL: 23,700 TL on the first 158,000 TL, plus 20% on the excess
- for income over 330,000 TL up to 800,000 TL: 58,100 TL on the first 330,000 TL, plus 27% on the excess
- for income over 800,000 TL up to 4,300,000 TL: 185,000 TL on the first 800,000 TL, plus 35% on the excess
- for income over 4,300,000 TL: 1,410,000 TL on the first 4,300,000 TL, plus 40% on the excess
How Income Tax is Calculated
Income tax in Türkiye is calculated using a progressive system based on cumulative earnings. The key steps are:
- determining taxable income by summing up all earnings
- deducting exemptions and allowances to find the net taxable income
- applying the applicable tax rate for each income bracket
- deducting social security contributions and unemployment insurance from gross income to determine the tax base
Support for Young Entrepreneurs
Entrepreneurs under the age of 29 who have never been taxpayers before are eligible for an income tax exemption of up to 330,000 TL in 2025. This initiative aims to support young businesses and encourage entrepreneurship.
Other Tax Applications
- Residential Rental Income: The exemption threshold for residential rental income has been increased to 47,000 TL in 2025. Income below this threshold does not require a tax declaration.
- Directly Expensed Fixed Assets: The threshold for fixed assets that can be directly expensed has been updated to 9,900 TL (excluding VAT).
- Suspicious Trade Receivables: Commercial receivables below 20,000 TL will not require legal or enforcement proceedings for tax deductions in 2025.
- Minimum VAT Refund Threshold for Reduced Rates: The lower limit for VAT refunds applicable for reduced tax rates has been updated to 130,700 TL.
Understanding these regulations will help international entrepreneurs navigate Türkiye’s tax system effectively and benefit from available incentives.
