Taxation of minimum wage in Turkey

The minimum wage is a compulsory wage which is set by the public power and prohibits employers from paying lower wages. Minimum wage practices are one of the most important means of social policies in order to achieve the aim of the social state that emerges in industrial society. With the understanding of the social state, which can be expressed as an objection of the working class living at the level of misery, minimum wage practices have emerged. The primary aim of the minimum wage applied in many countries around the world today is to provide the worker with a minimum standard of living. While using the authority of taxation in order to ensure justice and equality in taxation, the states apply a number of tax techniques which indicate taxable amounts exceeding of the income of the minimum living standard and exclude the part providing the minimum level of life by taking into account the financial power of the taxpayers. The most important of these techniques are the principle of differentiation, tax exemptions, progressing tax rates and minimum subsistence allowances. The taxation of minimum wage income is, however, a controversial issue. The deduction as a result of taxation of wage income, which is determined by the state and indicates the minimum livelihood level, may have consequences contrary to the purpose of minimum wage application. Taxation of the income required for minimum life is also incompatible with the principle of justice in taxation. In this respect, the aim of this study is to examine the concept of wage and minimum wage from theoretical and practical approach then to analyse the techniques to reach financial power, tax burden on wage earners and other burdens for taxation of minimum wage.