Can I Claim Personel Ucretleri (Staff Salaries and Employer Costs) as a Business Expense in Turkey?
Yes — employee gross wages plus the employer's SGK contributions (22.5% social security + 2% unemployment insurance = 24.5% on gross wages) are fully deductible business expenses under Gelir Vergisi Kanunu Article 40 and Kurumlar Vergisi Kanunu Article 8. Total employer cost including SGK is deductible in full.
What GIB (Gelir Idaresi Baskanligi) says
Gelir Vergisi Kanunu Article 40/2 (wages as deductible expense). Kurumlar Vergisi Kanunu Article 8 (corporate deductions). SGK Law No. 5510 employer contributions are deductible expenses. Salaries must be actually paid; accrued but unpaid wages are deductible only when paid.
When you can claim
- All gross employee wages including base salary, overtime pay, bonuses, and holiday pay (Yıllık İzin Ucreti)
- Employer SGK premiums: 22.5% for social security + 2% for unemployment fund — both fully deductible
- Employer-funded private health insurance premiums for employees (deductible up to 5% of gross salary per employee)
- Manager (Mudur) fees in a Limited Sirketi — deductible if there is a formal Hizmet Akdi or Mudurlu Ucret agreement
- Severance pay (Kidem Tazminati) when actually paid to departing employees — deductible in the year of payment
- Employee training, meal vouchers, and transportation allowances within legal limits
When you cannot claim
- Disguised profit distributions to owner-directors structured as inflated salaries far above market rates — Revenue Administration can reclassify excess as non-deductible dividends
- Payments to employees not on the SGK roster (kayit disi workers) — the cost is non-deductible and triggers severe SGK and tax penalties
- Salaries accrued but not paid by year-end — Turkey follows a cash-basis rule for wage deductibility
- Amounts exceeding the arm's-length benchmark for owner-managed companies under thin capitalisation and transfer pricing scrutiny
Good to know
Pro tip: Turkey's minimum wage changes twice a year (January and July). Always recalculate SGK and Gelir Vergisi withholding obligations at each change. For owner-director Mudur fees in an Ltd, document the fee in the annual shareholders' resolution (Genel Kurul Kararı) before payment — retrospective agreements attract Revenue Administration scrutiny.
Related expenses
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