INCOME-TAX-EXEMPT CHILD ALLOWANCE AMOUNTS UPDATED AS OF 1 JULY 2026
Some employers pay their employees a regular monthly social allowance (child allowance or child supplement) on account of having children. This is not a statutory obligation; it is a discretionary benefit offered at the employer's own discretion, typically as part of HR policy or a collective bargaining agreement. Under the Income Tax Law, the portion of such child allowances up to a specified threshold is exempt from income tax, while any amount paid above that threshold is taxed as ordinary wages. The exemption threshold is set by reference to the child allowance paid to civil servants, and it changes automatically whenever the civil servant salary coefficient is updated each January and July.
Pursuant to the Ministry of Treasury and Finance's Circular No. 5 dated 2 July 2026 on Financial and Social Rights, which set the civil servant salary coefficient at 1.575512, the exemption thresholds applicable for the 1 July - 31 December 2026 period have also been recalculated.
Updated Exemption Amounts
The monthly income-tax-exempt child allowance amounts applicable from 1 July 2026 are as follows:
- For children aged 0-6: TRY 787.76
- For other children: TRY 393.88
These amounts replace the previous period's (1 January - 30 June 2026) thresholds of TRY 693.94 and TRY 346.97, respectively.
Practical Note
The exemption is calculated separately for each child; for employees with more than one child, each child is assessed according to their own age bracket. Employers may pay child allowances above these thresholds, but the excess must be added to net wages and subjected to income tax and stamp duty withholding. Payroll systems should be updated to reflect the revised exemption thresholds effective 1 July 2026.
