The Muhtasar Premium and Service Declaration affects all businesses operating under the Social Security Institution (SGK). As a result of this change, errors in consolidating employee notifications to the SGK and payroll income tax declarations to the Revenue Administration can lead to various penalties.
Notifications Will Be Sent to the Tax Office, Not SGK
Under the Muhtasar Premium and Service Declaration system, the notification of employee status previously sent to SGK and the payroll income tax declarations submitted to the Revenue Administration were combined into a single declaration. This new declaration has been in effect for all employers across Turkey since July 2020. Accordingly, the declaration for July 2020 must be submitted by August 26.
Although there have been requests to postpone submission deadlines until the beginning of the year due to the ongoing pandemic, unless an official change is announced, declarations must be filed by the end of August.
From now on, under Law No. 5510, reporting the services and earnings of employees in 4A and 4C status will be done not to SGK but to the tax offices where the employer is registered. When the Muhtasar Premium and Service Declaration is in force, reporting the job title and occupation code for each employee becomes essential.
Pay Attention to Occupation Codes
With the Muhtasar Premium and Service Declaration, it is important to report employees’ job titles and occupation codes accurately. Employers must correctly and completely identify each employee’s job title and the matching occupation code on the declaration.
The job title and occupation code must match the work the employee actually performs at the workplace and must be selected from the official ISKUR occupation codes list so they can be entered on the Muhtasar and Premium Service Declaration. The crucial point is that the occupation code should reflect the employee’s actual duties for the relevant month, not the position they held when they were first hired. In other words, if the employee’s function has changed since hiring, the job description and code must be updated accordingly.
If an employee moves from one role to another or their duties change at the workplace, their job title and occupation code must be updated. For example, if someone who started as a supervisor is now acting as a manager, the job title and code reported on that month’s Muhtasar and Premium Service Declaration must reflect the current role.
Penalties for Failing to Report Occupation Codes
Penalties apply to employers who fail to report occupation codes correctly. If the occupation code entered on the Muhtasar and Premium Service Declaration does not correspond to the actual work performed by the insured employee, or a false code is provided, an administrative fine may be imposed. The fine is calculated per misreported insured worker at the rate of one‑tenth of the minimum wage, provided the total monthly amount does not exceed the minimum wage. In other words, if an employer misreports the job title and code for two employees, a separate administrative fine will be calculated for each affected person.
There is also an upper limit to the penalty related to occupation code errors. In no case should the fine for a wrongly reported code exceed the gross amount of the minimum wage. For this reason, employers must pay careful attention to job titles and occupation codes under the new system.
If an employer deliberately reports a false job title or code—for example, downgrading an employee’s actual duties to a lower‑level job—the employer may face higher sanctions under Article 102 of Law No. 5510. Employers preparing declarations should remember that, under the new arrangement, reports must be submitted to the tax offices (Ministry of Finance) rather than to SGK.