What Is the Minimum Living Allowance (AGİ) in Türkiye?
Region: Türkiye
Definition
Minimum Living Allowance (AGİ): The credit against an employee’s computed income tax in Türkiye from 2008 to 2021: 50% of the yearly gross minimum wage at the start of the year for the taxpayer, extra shares for a spouse and children, multiplied by the first bracket rate and divided by twelve. The minimum wage exemption replaced it on 1 January 2022.
The minimum living allowance (asgari geçim indirimi, AGİ) was the amount credited against an employee’s computed income tax in Türkiye from 2008 to 2021: 50% of the yearly gross minimum wage of January for the taxpayer, plus family shares, times the first bracket rate, one twelfth a month. The minimum wage exemption replaced it on 1 January 2022.
Rates
The shares in the repealed article 32 of the Income Tax Law: 50% for the taxpayer, 10% for a spouse without work or income, 7.5% for each of the first two children, 10% for the third child (5% before 1 May 2015), 5% for each further child. The total could not exceed 100%. When both spouses worked, only one of them claimed the children.
In the calculation
monthly AGİ = January gross minimum wage × 12 × total share × first bracket rate ÷ 12. For a single employee in 2008: 608.40 × 0.50 × 0.15 = 45.63 TL; in 2021: 3,577.50 × 0.50 × 0.15 = 268.31 TL. Payroll deducted this amount from the computed income tax; when the tax was smaller, the difference was lost. The yearly amounts and rates are on the wage tax relief data page, and the gross-to-net calculator runs past years’ payroll.
Since 2022
Law no. 7349 abolished the AGİ and exempted the part of every wage that matches the minimum wage from income tax and stamp duty. The exemption ignores family status, is the same for every employee, and equals the tax on the minimum wage, so it is far larger than the AGİ was.