Insurance Status of Company Partners in Türkiye: SSI Applications for Limited Liability and Joint Stock Companies

The insurance status of company partners varies according to the regulations of SSI (Social Security Institution) in Türkiye. Many business owners, especially those with limited and joint stock companies, are uncertain about which insurance status their partners should be reported under. In this article, we will provide detailed information on the insurance status of partners in limited and joint stock companies, SSI reporting processes, and tax obligations.

1. Insurance Status of Limited Company Partners

Limited company partners cannot be registered as 4/1-a (SSK) insured in their own companies. These individuals must be insured under 4/1-b (Bağkur). However, they can receive wages or attendance fees for their actual work. These payments are not subject to SSI and unemployment premiums, only income tax and stamp duty deductions are made.

Important points:

As of January 1, 2022, the income tax and stamp duty exemption applied to the minimum wage is valid for wages or attendance fees paid to these individuals.

4/1-b insurance premiums must be paid personally and can be shown as an expense in the income tax return.

If a limited company partner works as a 4/1-a insured in another company where they are not a partner, the mandatory 4/1-b insurance is suspended.

When 4/1-a insurance in another company ends, 4/1-b insurance automatically becomes active.

If a limited company partner is mistakenly reported as a 4/1-a insured in their own company, the SSI notifications must be transferred to the 4/1-b insurance status.

2. Insurance Status of Joint Stock Company Partners

Joint stock company partners are subject to different insurance statuses depending on whether they are shareholders without being on the board of directors or both shareholders and board members.

2.1. Shareholders in a Joint Stock Company Not on the Board of Directors

If these individuals are actively working in the joint stock company, they can be reported as 4/1-a (SSK) insured.

4/1-b (Bağkur) insurance is not applicable for these individuals.

2.2. Shareholders in a Joint Stock Company Who Are Also Board Members

Shareholders who are on the board of directors cannot be reported as 4/1-a insured in their companies.

These individuals must be insured under 4/1-b.

Board members can receive wages or attendance fees from the company, but these payments are not subject to SSI and unemployment premium deductions. Only income tax and stamp duty deductions are applied.

As of January 1, 2022, they can benefit from the income tax and stamp duty exemption applied to the minimum wage.

4/1-b insurance premiums must be paid personally and can be shown as an expense in the personal income tax return.

If joint stock company shareholders are mistakenly reported as 4/1-a insured, these premiums must be transferred to the 4/1-b insurance status.

Conclusion

Limited company partners cannot be reported as 4/1-a insured in their own companies, but they can work under 4/1-a in another company.

In joint stock companies, shareholders not on the board can be 4/1-a insured, while board members must be 4/1-b insured.

Incorrect insurance notifications should be corrected by applying to SSI.

For wage and attendance fee payments, SSI and unemployment premium deductions are not made, only income tax and stamp duty are calculated.

As of January 1, 2022, income tax and stamp duty exemptions are applied to certain wages.

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.