New income tax schedule overshadows the impact of raises: Salaries will decrease after March

While employees were looking forward to their new salaries in 2026, the adjustment in income tax brackets has brought question marks along with the joy of raises. According to current legislation, while salary, overtime, and additional payments are included in the employees' tax base, the mismatch between salary increases and adjustments in tax brackets causes the raises received to melt away rapidly. This situation could create serious income losses for both public sector and private sector employees.

SGK expert İsa Karakaş, in his assessment regarding the new schedule that will be effective in 2026, warned that "Most employees will enter a higher tax bracket before the first quarter of the year ends, and thus the net salary they receive will decrease."

HOW HAVE THE 2026 INCOME TAX BRACKETS CHANGED?

While the revaluation rate for 2026 was announced as 25.49%, the income tax brackets were updated slightly below this rate. Accordingly, the following rates will be applied to the amount remaining after the 15% SGK and unemployment insurance deduction from the gross wage:

• Up to 190,000 TL: 15% tax,
• Between 190,000 TL - 480,000 TL: 20% tax,
• Between 480,000 TL - 1,150,000 TL: 27% tax,
• Between 1,150,000 TL - 4,300,000 TL: 35% tax,
• Above 4,300,000 TL: 40% tax.

The first bracket had been set at 158,000 TL the previous year. However, the new limit of 190,000 TL remained below the expected level.

RAISED SALARIES MELT AWAY WITH RAPIDLY RISING TAX BRACKETS

While the raises received by civil servants and workers at the beginning of the year please their pockets, it seems inevitable that many employees will move to a higher tax bracket in the third or fourth month due to the failure to raise tax brackets. This transition will accelerate, especially with the effect of public employees receiving raises twice a year. According to experts, approximately 2-3 months' worth of salary could go to taxes by the end of the year.

MINIMUM WAGE EXEMPTION CONTINUES

Despite this increase in taxes, the minimum wage exemption applied to employees will be maintained. According to the regulation in force since 2022, 15% income tax and 0.79% stamp duty are not collected from income up to the minimum wage amount. This practice will also be valid in 2026, and the portion of the salary corresponding to the minimum wage will be kept tax-exempt. However, those who receive salaries from more than one employer may have to declare their income separately if they exceed the annual tax base.

INSUFFICIENT INCREASE IN INCOME BRACKETS STRAINS EMPLOYEES

As emphasized in İsa Karakaş's analysis, the fact that the update in tax brackets remains below inflation and salary raises reduces the purchasing power of employees. The year 2026 will require employees to follow not only their livelihood but also the rise in tax brackets. Experts underline that a fairer increase in tax brackets is necessary to protect the net income of employees.

News Source: 12punto