Minimum Wage

The minimum wage is the lowest salary paid to insured people in Turkey. When determining the minimum wage, the lowest wage required for the worker to maintain his life is taken into account. It is legally forbidden to employ workers below this determined wage. As a result of the negotiations held every year, the minimum wage is determined and throughout the year, the employer has to give at least this amount to each employee. Today, the minimum wage is in effect in many developed and developing countries in the world.

How did the Minimum Wage emerge?

You may wonder what is the minimum wage and how did it come about or why such a wage system was needed? This wage system, which applied in many countries upon the recommendations of the International Labor Organization, emerged when the labor supply was more than the labor demand. In countries where this situation is experienced, it is applied to protect the low-paid labor mass and the organization.

It was first implemented in Turkey in 1967 within the framework of Labor Law No. 1036 (1951). Since then, the minimum wage rate for that year is determined by the commission attended by employers, workers, and government representatives every year. At this stage, the wage to cover agricultural workers and apprentices is calculated separately.

How is the Minimum Wage Determined?

The economic data of the country is taken into account in the minimum wage determination process. In particular, the inflation rate is an important determining criterion. Considering the economic situation, a figure that the worker can sustain his life is revealed. In the wage determination commission, the representatives of the workers and employers present the wage proposal they demand to each other. The minimum wage to be applied that year is determined as a result of the mutual agreement of the parties.

What is the Minimum Living Allowance (AGI)?

Minimum Living Allowance or AGI is one of the important parameters used when calculating the minimum wage. It is calculated according to the marital status of the person and the children he has. This amount is subtracted from the person's total income and no tax is charged on this part. The employer pays this amount to the employee on behalf of the state, and in return, this amount is deducted from the employer's income tax. In other words, although the employer seems to be making this additional payment, it is a payment made by the state to the employee.

How is the Minimum Living Allowance Calculated?

While calculating the minimum wage, the extra paid AGI is also calculated. During the calculation of AGI, the gross amount of the minimum wage determined for that year is taken into account. According to this;

• 50% for the working person himself
• If his wife is not working and has no income, 10% for her
• 7.5% each for the first and second child of the person
• 10% for his third child
• A discount of 5% is applied for each fourth and subsequent child.

This amount usually corresponds to the first tranche of income tax and is treated at 15%. The discounted income is multiplied by the rate of 15% and the result is divided by 12 to find the AGI amount.

How Much is the Current Minimum Living Allowance?

The lowest amount for the minimum living allowance applied for 2021 is 268.31 TL. In addition to this wage, additions are made according to the person's marital status and the number of children he has.

How Much is the Current Minimum Living Allowance?

The lowest amount for the minimum living allowance applied for 2021 is 268.31 TL. In addition to this wage, additions are made according to the person's marital status and the number of children he has.