Among the most important questions addressed to us during this period that the short-time working applications are quite intense is how to act in terms of both the short-time working allowance and the SSI premium if the difference between the short-time and normal salary of the employee is paid. The subject of our circular is consisting of our recommendations regarding the action to be taken in line with the existing legislation. Although there is an expectation that a circular/general letter will be shared by SSI on this matter, it has not been published yet.
1. Regulation within the Law no.5510
The paragraph (a) of the first clause within Article 80 of the Social Insurance and General Health Insurance Law no.5510 provides context resolving the matters indicated below in determining the calculation of their earnings basic to premium:
It is ensured that the
1) Deserved wages,
2) The payments made in a month from premiums, bonuses and all kinds of benefits and the amounts paid by employers to the private health insurance and private pension system for the insured,
3) Pertaining to the decision made by the administrative or judicial authorities, the gross sum of the payments made to the insured in a month, in the nature of the earnings indicated in sub-clauses (1) and (2) above, shall be taken as basis.
It’s ensured in the sub-clause (b) that, in-kind benefits and death, maternity and marriage benefits, travelling expenses, mobile duty compensation, severance pay, a total payment made in the form of termination compensation or severance pay, reconnaissance fee, notice and cash indemnity and food, children and family hikes to be determined by the Institution by years, private health insurance premium and private pension contributions paid by employers to the private health insurance and private pension system for the insured that the monthly total does not exceed 30% of the minimum wage will not be subject to the earnings basic to premium,
It’s ensured in the sub-clause (c) that, excluding the exceptions mentioned in (b), all payments no matter what the name is and cash payments made to replace the in-kind aid will be subject to earnings basic to premium; exemptions and exceptions indicated as not subject to premiums in other laws will not be considered in the implementation of this Law.
According to these provisions, in sub-clause (a), a rule has been set regarding the earnings that will be taken into account in the calculation of premium by sampling, exceptions to this rule are included in sub-clause (b) of the same paragraph and limitations are made on earnings that will not be taken as basis during premium calculation and it’s ensured in the sub-clause (c) that excluding the exceptions indicated in sub-clause (b), whatever the name is, all payments and cash payments made to replace the aid in-kind will be taken into account during the calculation of premium.
2. Regulation in the employer implementation Communique
As per the article titled as “7.5- Payments other than fee that exceeds the upper limit of the earning basic to premium” within the Employer Implementation Communique published in the Official Gazette no.28398 dated 01.09.2012;
All kinds of payments such as premiums and bonuses paid to the insured except for the wage are included in the earnings of the month in which payment is made and subjected to premium. However, if the aforementioned payments are combined with the wage and are subject to premium, some insured's monthly amount of earnings basic to premium may exceed the upper limit of earnings basic to premium.
In that circumstance, if the insured is made payment other than wage that can be included in the earning basic to premium, earnings of this nature will be subject to premiums, provided that they do not exceed thirty times the upper limit of daily earnings basic to premium; however, if both earnings total exceed the upper limit, the portion exceeding upper limit of the payment other than wage shall be included in the earning basic to premium amount of the following two months, taking into account the provisions of Article 82 within the Law.
Example- Assuming that the insured (D), whose gross monthly salary is TL 4.000,00 has unpaid leave in 2012/January and that a gross TL 6.000,00 bonus is paid in the relevant month, as the monthly earning upper limit is taken into account as TL 5,762.25 for the dates between 1/1/2012 and 30/6/2012, since the insured has no number of premium payment days in January, bonuses other than wage will be included in earning basic to premium of February and March.
Earning basic to premium for 2012/January =TL 0
Earning basic to premium in 2012/February TL 4.000,00 wage + 1.762,25 TL bonus = TL 5.762,25
Earning basic to premium in 2012/March TL 4.000,00 wage + 1.762,25 TL bonus = TL 5.762,25
will be notified to the Institution as above;
TL 1.762,25 X 2 = TL 3.524,50 bonus added to earning basic to premium,
TL 6.000,00 – TL 3.524,50 = TL 2,475.50 bonus will not be included in the earning basic to premium”.
3. Our assessment
Considering the provisions of the legislation described above;
► In applications for short-term working allowances due to Covid-19, that the activity will be partially and / or completely stopped for at least 4 weeks; since the service debt of the employees will disappear, the wage payment liability of the employer will not be mentioned as well. However, if the difference between the short-time working allowance and the current salary of the employee is considered to be paid in terms of grace, these difference payments may be as premium-bonus, etc, not primarily as a wage.
In case of a non-wage payment such as premium is made in a non-paid month, in order for this payment to be subject to the SSI premium, a fee-based payment must be available in the two months following the month of payment. If there is no fee payment in the next two months, it is understood from the Communique that there is no need to notify the SSI for non-wage payments. The most important stage to be considered here is that this process should be managed by the employer. This means that although a recognition transaction is required for a payment of this scope, such non-wage payments may not be included in the earnings base subject to premium. If a payment in this context is declared with a declaration and/or MUHSGK in the form of a premium gain of zero (0) days, the system will generate a premium accrual and issue debt.
► In cases where short work is done, since the staff will also be paid wages, in cases where short work is done, wages will also be subject to wages, and non-wage payments that may be made to complete salaries for the period of short work will also be subject to the SSI premium and will be added to the earnings base that is subject to premium. In this case, there will be no exception.
► Payments to be made in both cases will be subject to income tax deduction.
► If the insured is made a non-wage payment that can be included in the earnings basic to premium along with his/her wage and if the total of both earnings exceed the upper limit of earning basic to premium; the portion of non-wage payments exceeding the upper limit shall be included in the earning basic to premium amount of the following two months maximum, taking the provision of Article 5510/82 into account.
The Employer Implementation Communique was published in the Official Gazette in 2012 and no document related to its cancellation has been found so far. In this context, we would like to share our opinions regarding the necessary accounting and notification obligations by paying attention to these issues in payments to be made to the personnel.