Even though informality in labor markets have been studied widely, envelope wages, a hybrid form of informal employment, remains underexplored. In this form of infor- mality, some employees receive their wages from their employers in two forms, an official wage that is reported to the tax authorities and an envelope wage that is undeclared. Given difficulties in data collection, research in this area remains very limited. How- ever, the institutional set-up in Turkey provides a unique setting to study envelope wages. In Turkey, the wages are taxed at the source, and the tax payments are made by the firms. Therefore the firms have an incentive to underreport whereas the house- holds do not. We use data from two different sources, one collected at the firm level and the other at the household level, in an attempt to identify individuals who may be receiving envelope wages. We use various econometric techniques to construct wage estimates for individuals whose wages are likely to be underreported. Our paper is the first in the relevant literature to provide estimates of the prevalence and the size of underreporting and the associated tax losses when data on underreporting is not directly available.