# What is Insurance Premium, How is it Calculated? What are Insurance Premium Rates?

There is always a risk of encountering unexpected situations and negativities in life. Minimizing the risk and taking precautions in sudden events is one of the best investments that a person can make for himself. You can also insure yourself for unexpected situations by paying your insurance premium regularly; You can spend your daily life more stress-free. Of course, the value of the insurance premiums paid varies according to the desired service and the institutions providing this service. The premium paid to the Social Security Institution (shortly SGK) varies depending on whether the person benefiting from the service is an employee or an employer.

Insurance premium is simply the amount you pay when you buy an insurance cover. Every citizen in the Republic of Turkey has to pay insurance premiums in order to benefit from the social security provided by the state from the day he/she starts working.

Likewise, the employer is obliged to insure for each employee and to pay the amount determined as insurance premium for his employees to SSI in addition to the monthly salary payment. The amount paid by the employer as insurance premium is proportional to the gross salary of the employees. The amount of the insurance premium and its regular payment affect the accumulation of premium days and the pension that will be received when you retire from working life in the future.

## What are Insurance Premium Rates?

Premiums that every employer is obliged to pay on behalf of their employees are called SSI premiums. When calculating these mandatory premiums, they are calculated as 37,5% of the employee's gross salary. 14% of this is shared between employees and employers as workers' share, 20,5% employer's share, 1% worker unemployment rate and 2% employer unemployment rate. In other words, in total, a worker sets aside 15% of his gross salary, while the employer allocates 22,5% of his worker's gross salary for insurance payments.

## How to Calculate Insurance Premium?

For example, let's consider a worker whose gross salary is 10.000 TL. The amount to be paid to SGK for this worker is 3.750 TL.

1.400 TL (worker's share) + 100 TL (employee unemployment rate) = 1.500 TL of this is covered from the employee's salary.

The remaining amount of the premium is paid by the company as 2.050 TL (employer's share) + 200 TL (employer unemployment rate) = 2.250 TL.

## What Should Be Considered When Calculating Insurance Premiums?

The most important thing to consider when calculating insurance premiums is that premiums should be calculated on gross salary, not net salary. Thus, you can see the employee and employer shares much more easily.

## How is the Bonus Day Calculated?

Insurance premium days are calculated based on the number of days the employee has worked since he/she entered the workplace. When making this calculation, it is taken as 28 days, regardless of how many days (29, 30, 31 or 30) the month is.

However, if the employee does not work some days during the month and does not get paid for the days that he does not work, that is, if he takes unpaid leave, these days are subtracted when calculating the monthly premium.

Employees can now check their premium days, whether they are paid regularly or not, on their e-government pages.

## How is the Insurance Premium of Part-Time Employees Calculated?

Insurance premiums of part-time employees are paid for the day they work. Part-time employees, who are referred to as "part-time employees" in the SSI, can work at most 3/2 of the working hours of a full-time employee. For example, in a workplace where the weekly working hours are 45, part-time employees can work for a maximum of 30 hours.

While calculating the insurance premium of part-time employees, the employer pays for the day they work. In this case, unlike a full-time employee, there is a shortage of days. If a part-time worker works more than 8 days in a month, he can benefit from general health services without having to complete the missing days.

## When is the Insurance Premium Paid?

Insurance premiums to be paid to SGK can be paid until the last day of the month. If the last day of the month coincides with the weekend or a public holiday, this payment can be made until the first business day following that day. Each month in which insurance premiums are delayed, a certain part of the amount to be paid is reflected in the debt as default interest. There are also criminal sanctions for the employer if the insurance premiums are not paid on time.

## Why Do Insurance Premiums Rise?

Insurance premiums paid to the Social Security Institution increase at the same rate as the salary of the employee increases. In addition, the SSI premium rates that the company and the employer are obliged to pay may vary if they benefit from current incentives. On the other hand, the change in the scope of the said coverage or the purchase of different guarantees in line with the individual's needs have an effect on the price increase in private insurances (real estate, health, vehicle, etc.).

In summary, in order for an employee to retire from business life when the time comes, he must have enough bonus days and not have SSI debt. For this reason, it is of great importance to check the insurance entry-exit days and whether the amount is paid correctly, especially during job changes.