Insurance Premium Calculation Process

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How Is the Insurance Premium Calculated?

The insurance premium is a mandatory deduction paid by employees and employers to contribute to the social security system. These deductions are calculated based on the rates determined by the Social Security Institution (SGK). The key elements in the calculation of the insurance premium are the employee's gross salary and any additional earnings linked to it.

General Method of Calculating Insurance Premiums

The general insurance premium refers to the regular contribution that individuals are required to pay to the state based on a certain income in order to be covered by the social security system. This premium is calculated according to the legal rates determined by the Social Security Institution (SGK), based on the insured person’s gross income. The calculation is usually made using the formula: “Gross income x premium rate.” Individuals who are voluntarily insured pay premiums on their own behalf, and through these payments, they can qualify for retirement, access healthcare services, and benefit from various social security protections. Therefore, accurate calculation of the premium is essential both for individuals to fully benefit from social security rights and for the sustainability of the system. For instance, if someone has a monthly gross income of 20,000 TL and the premium rate is set at 32%, they would pay 6,400 TL in insurance premiums each month. This rate is determined to include various components such as disability, old age, and death insurance, as well as general health insurance. In some cases, these rates may change by law or be supported by government subsidies. This system is especially aimed at providing social security for self-employed individuals, housewives, or people who work independently without an employer.

Calculating Insurance Premium Based on Salary

Insurance premiums based on employees’ salaries are calculated using the rates determined by SGK under Law No. 5510 on Social Insurances and General Health Insurance.

Under 4A (SSK) Coverage:

• Employee share: 14% of the gross salary

• Employer share: 20.5% of the gross salary

• Additionally, unemployment insurance is applied at a rate of 1% for the employee and 2% for the employer.

When calculating the insurance premium, not only the salary but also all regular payments such as meal allowances, transportation support, and bonuses are included in the gross income. This way, the income subject to the premium is determined.

Calculation in Case of High Salary and Premium Income

For employees with high salaries and regular premium income, the calculation is slightly different. In addition to the gross salary, payments such as bonuses and premiums are also considered. However, if the total income exceeds the ceiling wage determined by SGK, the excess portion is not included in the premium calculation.

Example:

• Monthly gross salary: 50,000 TL

• Monthly performance bonus: 5,000 TL

• Total income: 55,000 TL

If the premium-based income ceiling is below this total, say 45,000 TL, then the premium is calculated only on that ceiling amount. No premium is paid for the remaining 10,000 TL. For year-end bonuses, portions that exceed the ceiling remain subject to premium obligations for the following two months. However, in the third month, the remaining amount is no longer considered for premium purposes.

How Is the Number of Premium Days Calculated?

The number of premium days refers to the days recorded in the SGK system during which an employee is actively insured. This figure plays a crucial role in determining eligibility for retirement, access to healthcare services, and other social security benefits. Therefore, accurate calculation and complete reporting of premium days is important for both the employee and the employer.

Important Points in Calculating Premium Days

For Full-Time Employees: For full-time insured employees, premium days are typically calculated as 30 days per month. This assumes that the employee worked continuously and received a salary throughout the month. Since SGK considers a month as 30 days, premium reporting is done accordingly.

Starting or Leaving a Job Mid-Month: If an employee starts or leaves a job on any day during the month, only the actual days worked in that month are counted toward premium days. For example, if an employee starts on the 10th of the month, the premium days reported would be a maximum of 21 for that month. Similarly, if an employee leaves on the 15th, 15 days are reported.

Unpaid Leave, Sick Leave, Disciplinary Suspension: Days when the employee does not receive a salary or does not work—such as unpaid leave, periods covered by a medical report, or suspension due to disciplinary action—are excluded from the premium day count. In such cases, the employer must also declare the reason for missing days to SGK using the appropriate absence code.

Official Holidays and Weekly Days Off: Official holidays, weekends, and national/religious holidays where the employee is paid are also included in the premium days. Even if the employee does not work on these days, if they are paid, there is no deduction in premium days. This is secured by labor laws and collective bargaining agreements.

Insurance Premium Calculation for Part-Time Employees

The insurance premium for part-time (kısmi süreli) employees is calculated based on the total number of hours worked. The total monthly working hours are divided by the standard daily working hours of 7.5 to determine the number of premium days. The result is then rounded to the nearest whole number (ignoring decimals) to determine the reportable premium day.

When Are Insurance Premiums Paid?

Insurance premiums are of great importance in protecting employees’ social security rights, and it is mandatory that they are paid regularly within the designated periods. In Turkey, the deadline for paying insurance premiums is the last day of the month to which the premium relates. If this date falls on a public holiday or weekend, the deadline is automatically extended to the next business day, according to legal regulations. This allows employers and employees to make their premium payments without disruption. Especially for minimum wage workers, premium payments are deposited to SGK by the employer before salary payments are made. This process is vital to ensure employees receive uninterrupted social security coverage and that employers fulfill their legal obligations. Timely payment of insurance premiums by employers is necessary to avoid administrative penalties and ensure continued access to health, retirement, and other benefits for employees.

Conclusion

Insurance premium calculation is of great importance for the protection of employees’ social security rights and the sustainability of the system. Calculations made based on gross salary, additional payments, and premium rates ensure that employees fully benefit from healthcare, retirement, and other social security advantages. At the same time, accurate determination of the number of premium days and timely payment to SGK plays a critical role in protecting employee rights and fulfilling employer responsibilities. Therefore, having knowledge about insurance premiums and premium days is essential for the effective functioning of the social security system both individually and institutionally.