Director's Fee in Türkiye (2026): Tax, Social Security, Dividends and the Arm's-Length Test

Law checked: 11 September 2026. This guide uses the 2026 parameters and the official sources listed below. A director’s fee is not a standalone tax-exemption product; it combines corporate authorisation, payroll, income tax, social security and related-party pricing.

A shareholder can receive money from a company through different legal routes. Salary/director’s fee, dividend, expense reimbursement, loan and capital reduction are not interchangeable. Treating TRY 33,030 as a monthly “tax-free shareholder withdrawal limit” is the central error this guide corrects.

Short answer

A director’s fee paid for a genuine management role under a valid corporate resolution is salary. It can qualify for the 2026 minimum-wage relief and an arm’s-length amount can affect the company’s taxable profit. But:

• the whole TRY 33,030 is not automatically exempt from income tax;
• another employer changes where the exemption applies rather than cancelling it outright;
• 4/b shareholder insurance and 4/a employee payroll are different;
• there is no universal optimum director’s fee for every company;
• a dividend comparison is incomplete until any individual annual-return effect is tested.

1. Legal character: salary, not a dividend

Article 61 of the Income Tax Code treats payments made because of a management or supervisory-board capacity as salary. Calling the payment a “director’s fee”, “attendance fee” or another name does not change the result.

Three operating consequences follow:

1. The company processes it through salary withholding and payroll evidence.
2. It is not a distribution of the company’s post-tax profit.
3. Deductibility requires a real role, a business connection, evidence and an arm’s-length amount.

Authority also depends on company form. In a joint-stock company, compensation, attendance fees, bonuses, premiums and profit shares for board members can be set by the articles or the general meeting under Commercial Code Article 394. In an LLC, determining managers’ remuneration is a general-meeting power under Article 616. The resolution should state the role, period, start date and whether the amount is gross or net.

2. How the 2026 minimum-wage relief works

The 2026 gross minimum wage is TRY 33,030. The associated income-tax base, after the assumed employee social-security and unemployment contributions, is TRY 28,075.50. Under Income Tax Code Article 23/18, the income tax not collected is capped at the tax attributable to that base.

July is shown separately because the cumulative minimum-wage base crosses from the 15% to the 20% bracket in that month. Describing the relief as TRY 5,615.10 “from July onward” overstates July.

Stamp-duty relief covers the paper corresponding to the monthly gross minimum wage. If monthly salary exceeds TRY 33,030, the gross excess can remain subject to stamp duty under the general rule.

Why a 4/b shareholder should not assume zero tax

Where no 4/a employee social-security and unemployment contribution is deducted from a 4/b shareholder’s director’s-fee payroll, the salary income-tax base can arise on the gross payment. The Article 23/18 credit nevertheless remains capped at the tax calculated for the statutory minimum-wage base. A gross monthly fee of TRY 33,030 can therefore leave residual income tax for a 4/b shareholder.

The Revenue Administration’s 2026 Salary Guide also confirms two controls:

• Salary, bonus and director’s fee paid by the same employer in the same month share the relief once.
• With multiple employers, the relief applies only to the highest salary; it is not automatically lost.

3. Social security depends on status

Both “no social-security contribution is ever due” and “a contribution is always due” are unsafe shortcuts.

4. Deductibility and the arm’s-length boundary

Corporate Tax Code Article 6 imports the business-profit rules into the calculation of corporate profit. A gross fee connected with a genuine management service, accrued, documented and proportionate to the work may be considered under Income Tax Code Article 40.

The shareholder and company are related parties, so two further controls apply:

• Corporate Tax Code Article 11: a disguised profit distribution is not deductible.
• Corporate Tax Code Article 13: an amount inconsistent with the arm’s-length principle can be treated as a disguised distribution through transfer pricing.

There is no statutory safe harbour expressed as a fixed percentage of revenue or profit. Company size, responsibilities, time spent, sector and comparable management pay should be documented.

Domestic minimum corporate tax

An accepted director’s-fee expense affects commercial balance-sheet profit; it is not a separate exemption deducted only on the return. That does not justify a promise that domestic minimum corporate tax will never arise. Non-deductible expenses and the rest of the Corporate Tax Code Article 32/C computation must be tested across the whole file.

5. Dividend or director’s fee? One worked example with explicit assumptions

The table below is not a recommendation or universal optimum. It assumes only that:

• profit before the director’s fee is TRY 1,000,000;
• the shareholder is a Turkish-resident individual within 4/b and has no other income;
• the fee is spread through 12 monthly payrolls and is fully accepted as an arm’s-length expense;
• the ordinary corporate tax rate is 25%; and
• half of the TRY 750,000 dividend, TRY 375,000, stays below the 2026 filing threshold of TRY 400,000.

* This narrow example assumes the entire TRY 1,000,000 is accepted as compensation for a genuine service at arm’s length. A fee of this size may fail the arm’s-length test in many files.

On the dividend side, half of the TRY 750,000 distribution is exempt under Income Tax Code Article 22; the remaining TRY 375,000 is below the 2026 TRY 400,000 filing threshold under these assumptions. Higher dividends or other reportable income change the result. The fee side uses the 2026 salary tariff, annual minimum-wage tax relief of TRY 57,881.20 and stamp duty on the portion above the annualised gross minimum wage.

Decision lesson: The arithmetic can favour a director’s fee, but a genuine role and the arm’s-length test set the legal boundary. Publishing a single monthly “optimum” without those facts is misleading.

The director’s-fee calculator can compare scenarios. Its result is not a payment instruction until other salary, insurance status, annual filing and the arm’s-length file are added.

6. Annual-return tests for 2026

For withholding-taxed salary, monitor both thresholds:

1. Salary from one employer is filed if it exceeds TRY 5,300,000.
2. With multiple employers, all salary is filed if salary from employers other than the selected first employer exceeds TRY 400,000.
3. Even if later-employer salary does not exceed TRY 400,000, all salary is filed if total withholding-taxed salary exceeds TRY 5,300,000.

The individual can select the first employer. Tax withheld during the year is credited on the return. Non-residents, non-withheld salary and employer changes require separate analysis.

Implementation checklist

1. Document shareholding, management role, 4/a–4/b and retirement status.
2. Prepare the JSC articles/general-meeting authority or the LLC general-meeting resolution.
3. State the role, period and gross or net amount.
4. Build an arm’s-length file using comparable responsibilities and pay.
5. Combine all salary items paid in the month in one cumulative payroll calculation.
6. Apply the minimum-wage income- and stamp-tax relief only once.
7. Compare the combined company and shareholder burden with the dividend route.
8. Recheck cumulative brackets and annual-return thresholds quarterly.

Official sources

• Revenue Administration 2026 Salary Income Guide — director’s fees, minimum-wage relief and annual filing.
• Revenue Administration ruling dated 22 February 2023 — income- and stamp-tax relief for board compensation.
• Revenue Administration 2026 Investment Income Guide — dividend exemption, 15% withholding and filing.
• Revenue Administration 2026 Domestic Minimum Corporate Tax Guide — Article 32/C computation.
• Income Tax Code No. 193 — Articles 23/18, 61, 86, 94 and 103.
• Corporate Tax Code No. 5520 — Articles 6, 11, 13, 32 and 32/C.
• Social Security Institution status guide — 4/b status of company shareholders.
• Turkish Commercial Code No. 6102 — Articles 394 and 616.

This article is general information. Decide the payment only after reviewing company form, corporate authority, the shareholder’s insurance and other income, and the arm’s-length support.