Using an Employer of Record in Turkey

Hiring and paying employees in Turkey can be complex due to the need to comply with evolving local labor and employment laws. Employers must manage Turkey payroll, taxes, employment agreements, and statutory benefits correctly to remain compliant.

Using an Employer of Record in Turkey helps simplify this process. An EOR like Payoneer Workforce Management helps businesses manage local employment responsibilities while reducing administrative burden. Payoneer Workforce Management enables businesses to seamlessly build, manage, and pay global teams.

Want to learn more about expanding into Turkey without setting up a local entity? Learn more about Payoneer Workforce Management, or keep reading to understand how an Employer of Record in Turkey can help.

How to hire employees in Turkey

To engage talent in Turkey, businesses have three main options. They can set up a local legal entity, hire contractors, or use an Employer of Record in Turkey. 

Each comes with its advantages and disadvantages:

1. Establishing a local entity: This gives companies full operational control but requires significant setup costs and ongoing commitments. It also involves managing payroll, taxes, and benefits locally.
2. Hiring independent contractors: This option offers flexibility and is good for short-term or project-based work. However, misclassifying employees as contractors can result in penalties, such as retroactive tax and benefit payments.
3. Using an Employer of Record in Turkey: Engaging talent through an EOR in Turkey allows businesses to legally access employees without setting up a local entity. The EOR assists with managing payroll, taxes, benefits, and labor law requirements.

Payoneer Workforce Management provides Employer of Record services in Turkey. We assist you in mitigating compliance and contractor misclassification risks, and we help you set up localized benefits in accordance with local laws and requirements.

How to onboard employees in Turkey

Onboarding employees in Turkey involves issuing a compliant employment agreement, collecting employee documentation, registering for payroll, and enrolling employees in benefits where applicable.

When onboarding a new employee, it’s important to follow a clear and organized process. A smooth onboarding experience usually includes these steps:

• Payroll setup and benefits enrollment: Add the new candidate to the payroll system and complete all required benefit registrations to stay compliant with local employment laws.
• Equipment and access preparation: Make sure the employee receives all the necessary devices, tools, and system access so they can start working without any delays.
• First‑week orientation: Provide a simple, structured orientation during the first week to help the employee understand company policies, workflows, culture, and what is expected in their role.
• Team and stakeholder introductions: Arrange introductions with their immediate team and other key partners to support collaboration and help the employee feel connected from the beginning.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform.

Pay employees in Turkey

Understanding how to pay employees in Turkey is essential for staying compliant with payroll laws in Turkey. 

Employees in Turkey are paid in Turkish lira (TRY). Salaries are typically paid between the 5th and 10th of each month.

All wages must meet local requirements. The gross minimum wage in Turkey is TRY 26,005 per month. 

There is no statutory requirement to provide an annual bonus under Turkish labor law.

Income tax

Turkey applies a progressive income tax system. Employee income tax rates are as follows:

Social security and employer costs

Social security in Turkey covers retirement, healthcare, and disability benefits. Contributions are funded by both employers and employees, with additional support provided through government programs.

Employees benefits

Turkey’s Public Health Insurance system, known as the General Health Insurance (GSS), provides universal healthcare coverage for citizens and eligible residents. It is funded through individual contributions and government support.

The GSS covers a broad range of services, including:

• Preventive care, such as vaccinations and routine screenings
• Primary care, including doctor visits and medications
• Specialist and hospital care, such as surgeries and inpatient treatment
• Emergency medical services

An EOR, like Payoneer Workforce Management, offers a streamlined way to pay employees in Turkey. Our unified, all-in-one platform gives you a single dashboard to manage a global workforce and allows you to pay contractors and employees in just a few clicks.

Employment laws in Turkey

Employers in Turkey must comply with national labor laws covering working hours, overtime, probation, and notice requirements.

Working hours and overtime

The standard working schedule is 8 hours per day and 45 hours per week, including breaks. Total daily working time, including overtime, cannot exceed 11 hours.

Overtime compensation depends on when the additional hours are worked:

Probation and notice periods

Under Turkish Labor Law No. 4857, the maximum probation period is 2 months. During probation, either party may terminate the contract with 1 day’s notice. 

Once probation is completed, notice periods depend on the employee’s length of service:

Minimum wage in Turkey

The gross minimum wage in Turkey is TRY 26,005 per month.

The net minimum wage in Turkey is TRY 22,104 per month.

Employment contracts in Turkey

Employment contracts in Turkey should typically include:

• Identification details and legal addresses of the employer and employee
• The place and date of the contract’s execution
• The location where the work will be performed
• A description of the job duties and role
• The agreed salary, payment frequency, form of payment, and any non-monetary benefits like accommodation or meals
• The type of contract (fixed term or indefinite) and termination conditions

Specific details will vary depending on factors such as industry, location, and contract type, so it’s important to always check the guidance that applies to you. 

Payoneer Workforce Management enables you to onboard talent quickly and securely with localized contracts and payroll.

Leave policy in Turkey

Employers in Turkey must comply with statutory leave entitlements set out in the national labor code.

Public holidays and vacation time

Turkey observes 15.5 public holidays per year, including half days.

Vacation time depends on an employee’s length of service:

Parental leave

Maternity leave in Turkey is 16 weeks, typically taken as 8 weeks before birth and 8 weeks after. Employees are also entitled to 1.5 hours of paid nursing leave per working day until the child reaches 1 year of age.

Fathers are entitled to 5 days of paid paternity leave.

Parents may also take 10 days of paid parental leave, in case of any chronic disease or specially abled children.

Sick leave

There is no specific annual amount of sick leave in Turkey. The Social Security Institution (SSI) pays sickness benefits starting from day 3 of an illness. The first 2 days are unpaid.

Other leave

Employees are entitled to 3 days of paid compassionate leave in the event of the death of a first-degree relative. Additional compassionate leave may be granted at the employer’s discretion.

Employees are also entitled to 3 days of paid wedding leave.

3 days of paid leave for child adoption. Moreover, if the child is 3 or younger, one parent may avail 8 weeks of leave once the adoption is finalized.

During the notice period, employees are entitled to 2 hours of paid job-seeking leave per workday. This leave cannot be withheld.

Work permit in Turkey

Work permit rules in Turkey vary depending on the employee’s country of origin and the type of work being performed. Employers and employees should consult official government resources for the most accurate and up-to-date information.

Background check in Turkey

Employers may want to conduct background checks before engaging talent in Turkey. These may include criminal record checks, employment history verification, education verification, and social media checks, depending on applicable regulations. 

Employers typically need the employee’s consent and must disclose the nature of the checks being performed. It’s important to check local regulations before running any background checks in Turkey.

Employment termination in Turkey

Employment termination in Turkey must be based on valid grounds. Termination without just cause may be considered unfair dismissal and can result in legal consequences for the employer.

Valid termination scenarios

Employment in Turkey may end due to:

• Employee resignation
• Mutual agreement
• Termination during probation
• Employer termination due to misconduct, performance issues, or unauthorized absence

Notice requirements

After probation, notice periods depend on the employee’s length of service:

Severance and notice pay

Employees in Turkey may be entitled to severance pay and, in some cases, notice compensation, depending on how employment ends.

Severance pay applies to employees with at least 1 year of continuous service whose employment is terminated under qualifying legal conditions. 

Severance is calculated as 30 days of gross salary per full year of service, with pro-rated amounts for partial years.

If the required notice period is not provided, notice compensation (ihbar tazminatı) must be paid instead. This compensation equals the employee’s gross salary for the applicable notice period and is subject to income tax and stamp duty.

If severance or notice compensation is not paid, employees may seek resolution through mediation and, if necessary, the labor court.

Company registration in Turkey

Companies may choose to register a business in Turkey to establish a permanent presence, access local markets, or meet long-term strategic goals. Details on registration requirements and processes are available through official government websites.

For many businesses, however, using an Employer of Record in Turkey is a faster and simpler way to engage talent.

Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity.

PEO in Turkey

A Professional Employer Organization (PEO) in Turkey can support HR and payroll functions, but requires you to have a legal entity in-country. 

On the other hand, an Employer of Record in Turkey does not require a legal entity and instead serves as the legal employer for the local team. This often makes it the better choice for companies new to the Turkish market.

Payoneer Workforce Management’s Employer of Record services in Turkey

Payoneer Workforce Management helps growing companies onboard, pay, and manage employees in Turkey without setting up a local entity. 

As your EOR in Turkey, we offer assistance with employment contracts, benefits administration, taxes, and payroll, while you retain control over daily operations.

Book a demo to learn more about Payoneer Workforce Management.

FAQs

1) What is an Employer of Record in Turkey?

An Employer of Record in Turkey is a third-party organization that legally employs your workers on your behalf and manages payroll, taxes, and employment contracts so that you can engage without a local entity.

2) How much does it cost to hire in Turkey?

Employment costs can vary depending on the employee’s salary and other local factors. In general, expect to spend:

• 22.75% on an annual salary of USD 60,000 for regular employees
• 24.75% on an annual salary of USD 60,000 for retirees

Use our employee cost calculator to get a more accurate estimate.

3) Why should you hire talent in Turkey with an EOR?

Using an EOR in Turkey makes engaging talent in Turkey streamlined. Payoneer Workforce Management allows you to onboard and pay independent contractors and employees across the globe in 70+ currencies. Get in touch for more details.