Hidden Tax Burden in 2026: “Up to Three Months of Salary May Disappear”

With millions of employees in Turkey anticipating their January wage increases, a stark warning has been issued by Social Security Institution (SGK) Chief Inspector İsa Karakaş. Speaking in a detailed analysis on his YouTube channel, Karakaş argued that the upcoming adjustments to the 2026 income tax brackets could create what he calls a “hidden tax increase” that quietly erodes wage gains throughout the year.

Karakaş, who previously stated that the minimum wage could rise by approximately 25%, now emphasizes that the mismatch between salary hikes and the Revaluation Rate (YDO) could push workers rapidly into higher tax brackets. According to him, if income thresholds are not expanded sufficiently, employees will end up paying significantly more in taxes, diminishing the effect of the January raise.

“The Tax Bracket Trap”: A Warning for All Workers

Karakaş warned that income tax brackets are not just a procedural formality but one of the most decisive components shaping net salaries. If the brackets are updated only in line with the expected 25.49% revaluation rate, he claims the financial impact on employees could be severe.

In his translated remarks, Karakaş stated:
“Do not underestimate the income tax tariff. Depending on how it is adjusted, one, two, or even three months’ worth of your salary may be lost to taxes each year.”

The warning underscores the gap between headline wage increases and after-tax take-home pay—an issue he believes will intensify unless corrective action is taken.

Fiscal Drag: Why January and December Salaries Could Differ Sharply

Karakaş explained the phenomenon known in economics as fiscal drag, or “bracket creep.” This occurs when salaries rise due to inflation or negotiated wage adjustments, but income tax brackets do not keep pace. As a result, workers enter higher tax brackets earlier in the year and lose part of their wage increase to additional taxation.

He outlined a scenario based on expected 2025 and 2026 calculations:

• A worker earning a net 60,000 TL per month

• January–February: remains in the 15% income tax bracket

• March–April: cumulative income pushes the worker into the 20% bracket, and quickly after, the 27% bracket

Karakaş noted that by mid-year, the worker’s tax burden grows sharply while net pay shrinks month by month, creating a significant gap between the January salary and the December salary.

He emphasized:
“There will be a clear gap between what you earn in January and what remains in your pocket by December.”

The Authority to Fix the Problem Lies With the Presidency

Karakaş stressed that the solution depends on whether the government decides to adjust tax brackets more aggressively than the standard revaluation formula. He highlighted that President Recep Tayyip Erdoğan has the legal authority to widen income tax brackets beyond the YDO rate if necessary.

According to Karakaş:
“If the President uses his authority and widens the tax brackets not by 25%, but by 35% to 40%, the problem for workers will be resolved.”

Without such intervention, he warns, millions could face heightened tax pressure throughout 2026.

Which Groups Will Be Hit the Hardest?

Karakaş pointed out that not all workers will be affected equally. Some groups are more vulnerable to entering higher tax brackets earlier, depending on their gross salaries and existing benefits.

The most exposed groups include:

• Public-sector workers:
  With higher gross wages, they reach upper tax brackets earlier than other employees. Karakaş describes them as the group that “loses the most in take-home income across the year.”

• Civil servants:
  Although they are expected to receive around a 20% pay raise in January, Karakaş cautions that this benefit may effectively disappear by mid-year due to early bracket transitions.

• Private-sector workers (white- and blue-collar):
  As cumulative income increases during the second half of the year, this group is also expected to feel the pressure as net wages begin to fall despite rising gross pay.

Karakaş added that without a fundamental update to the tax system, 2026 could be even more financially challenging for workers than previous years.