How Restaurant Tips Are Taxed in Türkiye (2026)

Whether a tip produces tax depends on how you collect it. A tip taken separately from the price of the meal, through a POS device or an app, is not subject to VAT; the same money added to the bill as a service charge enters the VAT base. On the other side of the ledger, once the tip reaches your staff it is wage income: it is subject to income tax withholding and it does not appear on the list of items excluded from social security contribution earnings. These rules are specific to Türkiye. This guide reflects the legislation in force as of August 2026.

Most published material on this sits at one of two extremes: either "tips are tax-free, do not worry about it" or silence. Both are wrong. Türkiye's Revenue Administration answered exactly this question in a ruling dated 3 February 2025, and answered it for POS devices and mobile apps specifically. Everything below rests on that ruling, on a 2012 VAT ruling and on the statutes themselves.

The only distinction that matters

Two restaurants take the same money from the same guest. One adds ten percent service to the bill; the other offers a separate tip step at payment. The first pays VAT on that amount, the second does not. The only difference is how the collection flow was designed.

The 2025 ruling puts it plainly: tips paid through a POS device or a mobile app separately from the price of the goods or service cannot be treated as consideration for any supply, and are therefore not subject to VAT. It then draws the boundary in the next sentence: where the tip is added to the price of the goods supplied or the service rendered, it must be included in the VAT base under Article 24/c.

That article is the reason. It lists items included in the VAT base and it names service explicitly: price differences, interest, premiums and similar income, together with every kind of benefit, service and value provided under the heading of service or similar headings. A service charge added to the bill is therefore not a tip in law, it is part of the price. Calling it a tip changes nothing; what governs is whether it was added to the consideration.

What a tip does to your profit

The common claim is that tips are not the business's income and never touch the books. The Revenue Administration says otherwise. Relying on Article 6 of the Corporate Tax Law and Articles 38 and 40 of the Income Tax Law, the 2025 ruling states that tips collected separately through a POS device or mobile app may be tracked in the company's records under other income accounts, and that the amounts paid to employees may be deducted as a wage expense.

The mechanics are simple: income is recognised, an equal expense is recognised, and the net effect on the tax base is zero. But that outcome is not a right, it is the result of distributing the money.

The tax cost of retaining a share is only half the problem. The other half is labour law: Article 51 of the Labour Code requires these amounts to be paid in full to every worker at the workplace, and puts the burden of documenting the distribution on the employer. The proportions are fixed by an official points schedule. That side of the subject is covered in the guide to distributing tips to staff.

On payout, a tip is wage income

This is where the hope of a tax-free payout breaks. The 2025 ruling is explicit: tips must be treated as wage income, combined with the wages employees receive, and subjected to income tax withholding under Articles 61, 94, 103 and 104 of the Income Tax Law. It then confirms that the collection method is irrelevant: paying the tip in cash, through a POS device or through a mobile phone does not change its character as wage income.

The basis is the definition of wage in Article 61, which provides that paying an amount under the name of a premium, bonus, expense allowance or any other heading, or setting it as a percentage of turnover, does not change its nature as wage. A tip lands inside that definition.

General Communiqué No. 94 on Income Tax separates two cases:

In practice the second row governs. Insured salaried staff receive a wage from the business, so the tip is added to that month's wage and taxed on the combined figure. The first model is an exception in modern restaurant employment.

Why the minimum-wage exemption does not rescue the tip

Article 23(1)(18) of the Income Tax Law, introduced by Law No. 7349, exempts the portion of an employee's wage corresponding to the monthly gross minimum wage in force in the month of payment, after deducting the employee's social security and unemployment insurance contributions. A parallel exemption applies for stamp duty.

The 2025 ruling applies this exemption to tips directly, stating that the income tax and stamp duty exemptions may be applied to the total of wage income for the month, including tips received during that month and other payments in the nature of wages.

The subtlety is missed almost everywhere. The exemption is not a separate relief granted to tips. It is applied once, to the total of monthly wage income. If your staff already earn the minimum wage, the exemption is consumed there and the tip is taxed at the ordinary rates. The same provision adds three further limits: the income brackets used to tax the excess are determined taking the exempt amounts into account, the tax not collected because of the exemption cannot exceed the tax that would be calculated on the monthly minimum wage, and for employees with more than one employer the exemption applies only to the highest wage. Worked examples are in General Communiqué No. 319 on Income Tax.

The social security side

Article 80 of Law No. 5510 provides that contribution earnings are calculated on the gross total of wages earned. Paragraph (b) of the same article lists what is excluded: benefits in kind, death, birth and marriage allowances, travel allowances, severance and notice pay, discovery fees, child and family allowances, private health insurance and pension contributions within limits, and part of the daily meal allowance. Tips are not on that list.

Paragraph (c) then catches everything else: apart from the exclusions in paragraph (b), all payments made under any name whatsoever are subject to contribution earnings, and exemptions in other laws providing that something should not be subject to contributions are disregarded in applying this Law.

There is no social security regulation specific to tips; the conclusion above follows from reading the article. Confirm your payroll treatment with your accountant.

Where the legislation is silent

The 2025 ruling explains how to record a tip in the books, but it does not prescribe which document to issue for the collection, or how a tip should appear on a new-generation fiscal cash register (ÖKC). No clear rule exists on that point.

The practical consequence is that the legislation defines the outcome, that the tip must stay separate from the price of the service, without defining the method. What actually creates the separation is your collection flow and whether your POS software adds the tip to the bill or carries it as a distinct line. For the fiscal register framework see the fiscal cash register guide, and for integration obligations between software and the register see the integration article.

Common misconceptions

1. "Tips are tax-free." No VAT may arise on the business side and the effect on the corporate tax base may be zero. But on payout the tip is wage income, it is withheld on, and it is absent from the exclusion list in Law No. 5510. The party that escapes tax is the business, not the employee.
2. "Tips never touch the books." The Revenue Administration says the opposite: they are tracked under other income accounts and the distribution is deducted as a wage expense. The requirement is to record them correctly, not to keep them off the record.
3. "A service charge and a tip are the same thing." A service charge added to the bill is the item named in Article 24/c of the VAT Law and belongs in the VAT base. The label does not decide the outcome; being added to the price does.
4. "The minimum-wage exemption makes tips tax-free." It applies once to the total of monthly wage income. If staff already earn the minimum wage, it is exhausted there and the tip is taxed in full.
5. "Collecting through a POS device puts tips in a different regime." It does not. The 2025 ruling states that collection in cash, through a POS device or through a mobile phone does not change the character of the payment. What a POS device changes is traceability, not the tax regime.

Because keeping the tip separate from the price is a collection-design question, in practice it comes down to the software you run. In dojofood's POS a tip is added with preset percentages, a free amount or by rounding up; it never mixes into the amount owed, it is recorded as a separate line on top of the bill, and it is totalled by payment method in the end-of-day reports. For the fiscal register flow, see the payment integrations page.

Official sources

• Ruling of 03.02.2025 on the taxation of tips received through POS devices or mobile applications, ref. E-38418978-125[6-2024/]: gib.gov.tr
• Ruling of 09.08.2012 on whether tip amounts included in invoices are subject to VAT, ref. B.07.1.GİB.4.34.17.01-KDV.24-2486: gib.gov.tr
• Ruling of 02.08.2013 on income tax withholding for tips given to musicians and waiters, ref. 62030549-120[94-2012/1190]-1166: gib.gov.tr
• Value Added Tax Law No. 3065 (arts. 20 and 24/c), current consolidated text: mevzuat.gov.tr
• Income Tax Law No. 193 (arts. 23(1)(18), 61, 64, 94), current consolidated text: mevzuat.gov.tr
• Social Insurance and Universal Health Insurance Law No. 5510 (art. 80), current consolidated text: mevzuat.gov.tr
• General Communiqués No. 94 and No. 319 on Income Tax, covering the minimum-wage exemption and the taxation of service money

This content is for information only; consult your tax adviser or accountant for circumstances specific to your business.