What is a freelance receipt and who issues it?

A freelance receipt (SMM) is a document issued by independent professionals (doctors, lawyers, engineers, tax consultants, etc.) in return for services. It is issued for work based on personal effort, knowledge, and expertise, done on one's own name and account. If you work under a company umbrella, you should issue an invoice, not a freelance receipt.

What is withholding tax and when is it applied?

Withholding is income tax that your client (payer) deducts and pays to the tax office on your behalf. If the client is a taxpayer institution/company, they withhold 20%. If you provide services to individuals (real persons), no withholding is applied. Withheld tax is offset in your annual income tax return. For example, for 10,000 TL gross service fee, 2,000 TL withholding is deducted.

What is VAT withholding and when is it applied?

VAT withholding is when certain buyer types (public, banks, insurance, etc.) declare part of the VAT to their own returns. Generally 50% (5/10) withholding applies to freelance services. So out of 1,000 TL VAT, you declare 500 TL and the buyer declares 500 TL. Regular companies and individuals do not apply withholding.

How to calculate from gross to net and net to gross?

Gross to net: Withholding and expenses are deducted from gross amount. Example: 10,000 TL gross, 20% withholding (2,000 TL), 20% expenses (2,000 TL) = 6,000 TL net. Net to gross: Net amount is converted to gross using formula. Example: To receive 6,000 TL net, required gross is calculated based on withholding and expense rates. Our calculator computes both directions automatically.

What is freelance expense rate?

When declaring freelance income, expense deduction is made at certain rates (lump sum expenses). This rate varies by profession: General professions 25%, health services 40%, software/engineering 20-40%. You can also declare your actual expenses with documentation. You can enter the expense rate yourself in the calculator.

What situations are VAT exempt in freelance receipts?

Some services are VAT exempt: Health services (doctor, dentist), education services, copyright income (writer, composer), services provided abroad (conditional). If exempt, no VAT is calculated and 'VAT exempt' note is written on invoice. Consult your tax consultant whether exempt.

Freelance Receipt Calculation

Self-employment receipt calculation with current rates. Easy Net to Gross, Gross to Net calculation.

Use this freelance receipt calculator to review gross amount, withholding and VAT step by step, then export the final net result as a report.

Input Parameters

Customer Type

Service Type

VAT Withholding Buyer Type(For VAT Withholding)

Calculation Type

Gross to NetNet to Gross

Gross Amount

Withholding Rate (%)

VAT Rate (%)

Date

Calculation Results

Gross Amount

10.000,00 TL

Income Tax Withholding

%20.00

-2.000,00 TL

= Net Amount

8.000,00 TL

+ VAT

%20.00

+2.000,00 TL

Amount to Collect

10.000,00 TL

Important Notes

⚠️Income Tax Withholding: This amount is deducted from your payment by the customer and paid to the tax office on your behalf.

⚠️VAT: VAT is collected from the customer and declared by you.

Comparison: Invoice vs Receipt

If It Was an Invoice (Normal Company)

Gross Amount:10.000,00 TL

VAT:%20.00

2.000,00 TL

Total Invoice:12.000,00 TL

For standard invoicing (e.g. Ltd. or Inc. company).

Freelance Receipt (SMM)

Gross Amount:10.000,00 TL

Withholding:%20.00

-2.000,00 TL

VAT:%20.00

+2.000,00 TL

Net Collection:10.000,00 TL

Customer's Total Cost =

Payment to You:10.000,00 TL

Withholding Tax (to Tax Office):2.000,00 TL

Total Cost:12.000,00 TL

The detailed breakdown of costs and payments.

Accounting Records

Customer Side (Expense)

Debit Accounts:

770 General Admin. Expenses:10.000,00 TL

191 Deductible VAT:2.000,00 TL

Credit Accounts:

320 Vendors:10.000,00 TL

360 Taxes Payable (Stopaj):2.000,00 TL

Note: Standard accounting record for the service receiver.

Freelancer Side (Income)

Debit Accounts:

120 Receivers / 100 Cash:10.000,00 TL

193 Prepaid Taxes (Stopaj):2.000,00 TL

Credit Accounts:

600 Domestic Sales:10.000,00 TL

391 Calculated VAT:2.000,00 TL

Note: Standard accounting record for the service provider.

Calculation Details and FAQ

Who Issues Self-Employment Receipts?

Those who work on their own account based on personal effort, scientific or professional knowledge (Doctors, Lawyers, Architects, Engineers, CPAs, etc.) issue it.

When is an Invoice Issued?

If the activity is carried out under a company roof (Ltd. or Inc.) within a commercial organization, an Invoice is issued instead of a Self-Employment Receipt.

Withholding Tax (Income Tax Deduction)

If your client is a taxpayer, they deduct 20% from the payment and pay it to the tax office on your behalf. This amount is deducted from your annual tax.

VAT Withholding

In services provided to certain buyers (Public institutions, etc.) (Consultancy, etc.), a portion of VAT is deducted by the buyer and paid (Usually 9/10).

Difference Between SMM and Invoice

SMM has withholding tax, invoice does not (with exceptions). SMM is based on collection, invoice is based on accrual.

Freelance Receipt Calculation

If It Was an Invoice (Normal Company)

Freelance Receipt (SMM)

Customer Side (Expense)

Freelancer Side (Income)

Calculation Details and FAQ

Who Issues Self-Employment Receipts?

When is an Invoice Issued?

Withholding Tax (Income Tax Deduction)

VAT Withholding

Difference Between SMM and Invoice

VAT Exemption

Frequently Asked Questions

Related Topics on This Page

Financial Calculation Tools

Blog Posts

Legal Disclaimer