Turkey has updated its individual income tax brackets for 2025. These changes reflect inflation and the country’s current economic situation. Both Turkish citizens and foreign employees will be affected. If you work or run a business in Turkey, it’s important to know how these new rates work so you can plan salaries, payroll, and budgets more effectively.
2025 Income Tax Brackets in Turkey
The new tax brackets were published in the Official Gazette on 30 December 2024. Turkey uses a progressive tax system, which means the more you earn, the higher the tax rate you pay.
| Annual Taxable Income (TRY) | Tax Rate |
|---|---|
| Up to 158,000 | 15% |
| 158,001 – 330,000 | 20% |
| 330,001 – 1,200,000 | 27% |
| 1,200,001 – 4,300,000 | 35% |
| Above 4,300,000 | 40% |
The highest rate of 40% applies to income over TRY 4.3 million per year.
Who Will Be Affected
- Employees – Salaries, bonuses, and benefits will be taxed based on the new brackets.
- Foreign employees – If you earn income in Turkey, these rates apply unless your home country has a tax treaty with Turkey.
- Employers – Payroll and withholding systems must be updated to follow the new rates.
Example: How the Tax Works
If someone earns TRY 500,000 a year:
- First TRY 158,000 is taxed at 15% = TRY 23,700
- Next TRY 172,000 (up to TRY 330,000) at 20% = TRY 34,400
- Remaining TRY 170,000 (up to TRY 500,000) at 27% = TRY 45,900
Total tax = TRY 104,000
Effective tax rate = around 20.8%
Why This Matters
For employees – Knowing the brackets helps you understand your take-home pay.
For employers – It helps in setting salaries, calculating payroll, and staying compliant with the law.
For expats – It makes it easier to plan for living costs and possible tax obligations in your home country.
Tips for 2025
- Check if your country has a double taxation agreement with Turkey.
- Keep records of deductions you might be entitled to, such as certain donations or retirement fund payments.
- Watch your yearly income, as bonuses or extra payments could move you into a higher tax bracket.
- If your income situation is complex, consider getting advice from a tax consultant.
Conclusion
The 2025 income tax update keeps the progressive system but adjusts the income thresholds to match inflation. Whether you are a local employee, a foreign worker, or a business owner, understanding the new rates will help you plan ahead and avoid surprises.
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