WHY IS FINANCE CALLING US TO COMPLETE A STATEMENT?
In June 2021, I left my old company. When I left my job, we made a mutual termination agreement with the employer that I would not work for competing companies in Central Anatolia and Marmara regions for 1 year. I received payment for this. I received an SMS from the Ministry of Finance on my phone. In the message, it says: “It has been determined that you earned reportable wage income in 2021. You can report your income with the Ready reporting system until March 31 and pay your tax so that you do not suffer no penalty.”
I think the message is about my profit from the Mutual Termination Agreement. In my research on the Internet, I came across your article stating that up to a certain amount of the mutual termination indemnity is tax exempt. I haven’t seen it anywhere else. What should I do? (Tamer T.)
The Ministry of Finance may have sent you such a message for two reasons. The first may be related to severance pay and the second may be related to salary you receive from more than one employer in the same year. Let’s start with the redemption fee.
In the event of termination of the employment contract within the framework of the agreement concluded between the employee and the employer, all the compensation paid was previously taxable. Changes were made with the law enacted in 2018. The details of the legal regulations were regulated in the General Income Tax Communiqué with serial number 303. According to the Communiqué, the part of the remittances such as indemnities paid under the mutual termination agreement or the mutual termination agreement, the indemnity for loss of employment, the indemnity for termination of employment, the indemnity for securing employment, in the limit of the severance pay ceiling determined for that date are exempt from income tax. In calculating the amount of the exemption, payments made as severance pay are also included.
The ceiling of the severance indemnity is determined by periods of 6 months. In 2021, the severance pay cap was applied at 7 thousand 638.96 TL between January 1 and June 30, and 8 thousand 284.51 TL between July 1 and December 31, 2021. termination up to the amount to be calculated based on your working time at the workplace is tax exempt. The portion exceeding the exemption amount is subject to income tax according to the tax rate to which you are subject at that time.
For example, let’s say you worked at the workplace you left for 5 years. The date of termination of the employment contract is no later than June 30, 2021. In this case, up to 38,000,194.80 TL of the severance pay and/or additional compensation (7,638.96 X 5 years) paid to you under the Mutual Termination Agreement are tax exempt. The part exceeding this amount is taxed at the rate to which you are subject at the end of June 2021.
Now consider the second aspect. Those who receive wage income from more than one employer in 2021 and those whose wage income from the second and subsequent employers exceeds 53,000 lira must submit a declaration by the end of this month. The second employer can be freely determined. For example, if the total gross salary you received from the employer you worked with until June exceeded 60,000 TL and the total gross salary you received from the employer or employers you worked for worked in the period July-December exceeded 53,000 TL, you must file a declaration. When calculating 53,000 lira, you must first deduct 15% of the insurance premium and the unemployment insurance premium from your gross salary. If the amount remaining after deduction of the bonus exceeds 53,000 lira, you must submit a declaration based on the total of your gross wages received during the year.
When completing the statement, you can list education and health expenses you incurred for yourself or family members in 2021, as well as life and personal insurance premiums as expenses. Up to 10% of your education and health costs and half of your insurance premiums are deducted from your income. If you have such expenses, you can also get a tax refund instead of paying additional taxes.
CAN THOSE WHO HAVE VOLUNTARILY STOPPED WORK BENEFIT FROM A SENIORITY COMPENSATION?
I was born on 10.10.1980. I started my professional life in January 2005 as an assistant doctor in a public hospital. During this time, I worked in various public and private hospitals continuously. To date, I have been working as a medical specialist in a municipal health facility since November 2016. If I voluntarily resign today, will I be entitled to receive my severance pay? How should I modify my letter of resignation in this situation? (Huseyin M.)
It is necessary to assess your situation separately as retirement bonus and severance pay. In case employees with the status of SSK or BAĞ-KUR retire after leaving the civil service, through service consolidation, a retirement bonus may be paid for the periods in the civil service. Thus, for retirees to receive bonuses in return for their period of service in the public service, their civil service must end in such a way as to give rise to a right to a severance indemnity. Those who voluntarily resign and leave the public service cannot collect retirement bonuses by accumulating their services. However, those whose length of service in the public sector is sufficient to retire on their own, despite having combined their services, can collect their bonuses. You cannot receive bonuses for your civilian service so far.
To receive severance pay in return for your work in private hospitals when you voluntarily resign, you must terminate the employment contract for just cause. For example, underpayment or non-payment of your wages, or non-payment of overtime wages are justifiable grounds for dismissal. Apart from this, to collect severance pay before retirement, you must meet retirement requirements other than age. People in 4/1-a status, who started working with insurance for the first time after September 8, 1999, can receive severance pay and leave when they have completed 25 years of insurance and 4,500 days premium or 7,000 premium days.
If you have worked continuously since January 2005, you have completed 4500 days. You will end the 25-year period of insurance in 2030. However, if you work without a vacancy, you can get your severance pay at your last place of employment and leave when you have completed 7000 premium days in 2025 in total public and private sectors.
If your premium day is between 4500 and 7000, you can collect severance pay from the workplace you left voluntarily from 2030, when you complete your 25-year period of insurance.
In order to receive severance pay by fulfilling retirement conditions other than age, a severance pay letter must be obtained from the Social Security Institution (SGK) before terminating the employment contract. You can apply for severance pay and time off by submitting this letter to the employer.
Those who terminate their employment contract without having received this letter from SGK lose their right to severance pay.
CAN THOSE WHO COMPLETE 3600 DAYS CONNECT THE PENSION?
On 1.5.1986 I got a job as an SSK employee. At the end of March 2022, I will have 2617 SSK and 983 optional days. I will be 58 years old on 09.05.2022. Can I submit a request for retirement? The day is exactly 3600, do I need to make an additional optional payment on top of that? (Selma C.)
If your number of premium days is correct, you do not need to pay any additional premiums because you have completed 3600 days. If you want to be sure, you can confirm the number of contribution days you have by asking the provincial social security office or the social security center to which you are affiliated before your retirement date.
If your premium day is exactly 3600, when you submit a pension application from May 10 until the end of the month, a pension will be granted from June 1.
CAN PERSONS EXPORTED BY LAW BENEFIT FROM A RETIREMENT PREMIUM?
I read your news about SGK’s retirement bonus decision. I am very happy with your news. My father started his career in the police in 1996. In 2020 he was removed from his position by decree. He has completed 22 years in the business, he has 5 years and 6 months of amortization. At the end of February 2022, we applied to SGK with the pension application, but we did not apply for a bonus. Should we make a request with a petition for the payment of the retirement bonus, how is the procedure? (Me like.)
Your father fulfilled the term of 25 years of service with attrition. He can receive the retirement bonus, because his working time in the public sector alone is sufficient for a pension. He/she must apply directly to the SGK unit which carries out the retreat operations.