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Turkey PEO Employment Services by Velocity Global

Turkey Employer of Record

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Turkey at a Glance

  • Currency: Turkish Lira, TRY/TL (₺)
  • Population: 83.05 million
  • Economy/GDP: $815.27 billion (19th largest)
  • Top Sectors: Textiles, food processing, mining, steel, construction, and motor vehicle manufacturing
  • Ease of Doing Business: Ranks 34 in the world, according to the World Bank’s latest Doing Business report from 2019
  • Languages: Under Article 42 of Turkey’s Constitution, Turkish is the official language. However, 30 minority languages exist in the country. Turkey has a low proficiency in English as it’s ranked 70th in speaking English as a second language, according to Education First’s English Proficiency Index, which analyzes data from 2.2 million non-native English speakers in 100 countries.

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Grow Your Team in Turkey

Velocity Global’s Turkey Employer of Record solution streamlines your business expansion into Turkey. Our Turkey EoR ensures a fast and compliant onboarding process—all without establishing a legal entity. We hire, onboard, and pay your supported employees, guaranteeing compliance while giving you the time to oversee your day-to-day business needs.

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Benefits of hiring in Turkey

  • Turkey’s strategic geographic location provides advantages for international economic influence. Turkey is centrally positioned between Europe and Asia, it’s essentially a door to key markets and vital centers of economic power.
  • The European Chemical Industry Council (Cefic) shares that Turkey is one of the top five countries in the world which supplies chrome ore to global markets. Turkey produces and exports some of the most important chemicals.
  • The youthful population in Turkey is a significant cause for workforce growth and strong placement in the labor market, rivaling many neighboring countries. Turkey ranks as a top country for its highly educated and competitive workforce.
  • The Turkish government offers extensive incentive programs for investors, benefiting businesses with low taxes to expand or establish new ventures. Hundreds of top tier international companies in the retail, automotive, and energy industries utilize Turkish research and development incentives.

Challenges of hiring in Turkey

  • The World Bank overviews Turkey’s economy as being highly dependent on energy and carbon, making it vulnerable to supply and price volatility. This creates difficulties for exporters due to global decarbonization policies.
  • Direct foreign investment is welcomed and desired but legal restrictions are present in various sectors. Investors are known to encounter a lingering bureaucracy and complex government regulations.
  • Political instability endures in Turkey with domestic and international features. The country’s political divisions are deep and Turkey’s neighbors bring complications within its borders. Tensions in Iraq and Syria have economic, political, and national security effects on Turkey.

Cultural nuances and must-knows of doing business in Turkey

  • In Turkish business practices, titles are used to greet colleagues and handshakes are given when meeting and leaving.
  • First impressions are important to the Turkish. When meeting Turkish colleagues for the first time, avoid discussions about religion and politics, such as the traditional Muslim headscarf, the hijab. Controversial topics of discussion in an initial meeting is perceived as impolite.
  • Personal relationships drive business relationships. Trust is the key factor in business dealings with the Turkish.
  • Turkish business relationships heavily value education, rank, and authority. The Turkish are a proud people, as a consequence saving face is important and embarrassing colleagues is unacceptable.
  • As a result of the Turkish deep appreciation of family, the most senior colleague is regarded as a mother or father figure since age is deemed a sign of wisdom and high esteem.
  • When elderly colleagues enter the room, there is an expectation for all to stand in greeting them.
  • There are a few nonverbal communication cues that are considered impolite such as crossing arms, placing hands in pockets, or stepping away from someone while having a conversation.

Wages and Salaries in Turkey

Minimum wage

  • As of July 1, 2022, Turkey’s national minimum wage has been set to TL5,500 per month, USD307.22. The minimum wage is determined by Turkey’s Minimum Wage Determination Commission at least once every two years.

Probation periods

  • Turkey has a minimum statutory probation period of two months. Collective labor agreements may extend the probation period for four more months. Termination without reason is possible during probation, by both the employer and employee.

Bonuses

  • Bonuses are not mandatory by Turkish labor law but they can be compulsory by employment contracts.

Onboarding

  • In Turkey, an employment agreement is the required contract accepted between employers and employees. An employment contract for an indefinite term is not required to be in writing. However, an employment agreement for a term of one year or longer must be written. Where there has been no written employment agreement, the employer is obligated to provide the employee with a written contract, within two months, including the following:
    • Conditions of work
    • Daily or weekly working time
    • Payment
    • Remuneration time intervals
    • Duration, if it’s a fixed-term employment
    • Any conditions concerning the employment termination

Termination and notice periods

  • With an indefinite-term employment agreement, the statutory notice periods are the same for employers and employees. The notice period is as follows:
    • If employees have worked for less than six months, they have two weeks.
    • If employees have worked between six and 18 months, they have four weeks.
    • If employees have worked between 18 and 36 months, they have six weeks.
    • If employees have worked for more than 36 months, they have eight weeks.
  • As the above are simply the minimum periods, they may be increased by an employee’s work agreement.
  • With a fixed-term employment agreement, a notice period is not required.
  • Employees who have worked for at least one year with their employer are entitled to severance pay of 30 days’ salary for each year of employment. The payment is limited to TL6,730.15 per year of employment.

Leave Entitlements in Turkey

Annual leave

  • Turkish labor law guarantees employees annual paid leave, if they have worked at least one year, for the following accrual periods:
    • One to five years of employment, including the fifth year: 14 days
    • Five to 15 years of employment, including the fifteenth year: 20 days
    • 15 years of employment or more: 26 days
  • Employees under 18 or over 50 years of age automatically receive 20 days of paid annual leave.

Parental leave

  • Turkish legislation Article 74, Turkish Labor Code No. 4857 guarantees a total of 16 weeks of paid maternity leave; eight weeks before and after childbirth. Maternity leave is extended to 18 weeks in the event of multiple pregnancies.
  • The mother can take an unpaid leave of up to six months after her maternity leave ends. Otherwise, during her maternity leave, payments are made from social security accounts.
  • Fathers receive five days of paternity leave at full pay by their employer.
  • Parents receive three days of paid leave when adopting a child.

Sick

  • The Turkish labor code designates a maximum of one week for sick leave, based on a medical report confirmation. Employers are not obligated to pay employees during their sick leave. However, employees are eligible to receive sick pay from the state after three days of sick leave.

National and regional holidays

  • Turkey has nine public holidays in a calendar year, which are not included in the minimum paid leave entitlement but are taken in addition to annual leave. The following are national holidays recognized by Turkey:
    • New Year’s Day (January 1)
    • Children’s Day (April 23)
    • Labor Day (May 1)
    • Ramazan Bayramı (March, April, or May, the specific days fluctuate each year)
    • Youth and Sports Day (May 19)
    • Kurban Bayramı (May, June, or July, the specific days fluctuate each year)
    • Democracy and National Solidarity Day (July 15)
    • Victory Day (August 30)
    • Republic Day (October 29)

Benefits in Turkey

  • The Ministry of Labor and Social Security controls and manages employment and social security affairs in Turkey. Residents benefit from the Turkish social security system by enrolling in the Turkish Social Security Fund. Through employer and employee contributions to the fund, all Turks receive access to free and low-cost healthcare, parental leave benefits, old age retirement pensions, temporary incapacity benefits, and unemployment benefits.

Tax and Social Security

  • Individuals are considered Turkish tax residents if:
    • They have a residence registered in Turkey
    • They continuously stay in Turkey for at least six months within a calendar year
  • Turkish tax residents are taxed on their worldwide income. Non-tax residents are taxed only on Turkey-source income.

Thresholds

  • As of 2022, the Turkish income tax code provides for the following categories:
    • ₺0 – ₺32,000: 15%
    • ₺32,000 – ₺70,000: 20%
    • ₺70,000 – ₺250,000: 27%
    • ₺250,000 – ₺880,000: 35%
    • ₺880,000 and above: 40%
  • The corporate income tax rate in Turkey is 23%.
  • Social security payments due on monthly salaries are the following:
    • Short-term risk insurance: 2% (paid by the employer)
    • Long-term risk insurance: 20% (11% paid by the employer and 9% paid by the employee)
    • Health insurance: 12.5% (7.5% paid by the employer and 5% paid by the employee)
    • Unemployment insurance: 3% (2% paid by the employer and 1% paid by the employee)

Health

  • Turkey introduced universal healthcare to its residents in 2003. The complex healthcare system is a combination of the Ministry of Health, universities, and the private sector. All healthcare and related government social welfare programs are coordinated by the Ministry of Health. The Ministry is responsible for providing healthcare to residents of Turkey and organizing preventive health services, building and operating state hospitals, supervising private hospitals, and regulating medication prices.

Pension

  • Employees in Turkey are subject to different retirement ages depending on their gender and when they began contributing to the social security system.
  • Employees who entered the system before April 30, 2008, have the ability to receive their pension at the age of 58 for women and 60 for men, if they have either:
    • 7,000 days of social security contributions paid on their behalf by their employer
    • 25 years in the system and at least 4,500 days of social security contributions paid on their behalf by their employer
  • For employees who entered the system after May 1, 2008, the retirement age will incrementally rise beginning from the year 2036 up to 65 years of age.
  • Employees who entered the system after May 1, 2008, have the ability to receive their pension at the age of 58 for women and 60 for men if they have either:
    • 7,200 days of social security contributions paid on their behalf by their employer
    • 5,400 days of social security contributions paid on their behalf by their employer, including having that amount in the three years prior to the employee reaching the applicable age limit.
  • There is no fixed amount for the state pension. The amount depends on the number of days the employee has paid social security contributions and the amount of contributions paid on their behalf by the employer.

Payroll in Turkey

Tax dates

  • In Turkey, the tax year is the calendar year. The filing deadline for tax returns is April 30.

Cycle

  • The payroll cycle in Turkey is monthly.

Average hours

  • The maximum working hours permissible is 45 hours per week. Working hours can be distributed differently over the week given that they do not exceed 11 hours per day.

Overtime

  • Time worked over 45 hours in a week is considered overtime and it’s compensated at 150% of an employee’s regular pay. Overtime cannot exceed 270 hours per year.

Why Work in Turkey?

Turkey is located at the crossroads of the Balkans, the Middle East, and the eastern Mediterranean. The country lies partly in Europe and Asia, where it’s historically acted as a bridge between the two continents. It is among one of the larger countries in the region by territory and population, including its land mass being greater than any in Europe. Turkey is a strategic and geopolitically powerful trade partner due to its location and its successful industries. Turkey produces and exports some of the most important chemicals in the world and its workforce growth enables it as a competitive choice for foreign direct investment.

Those searching for reasons to work and live in Turkey can look forward to strong infrastructure, powerful health services, profitable investment opportunities, a hospitable community, and an ocean climate, as the country is surrounded by three different seas. Turkey, as a whole, is united by a strong national identity. Turks share the core cultural values of hospitality, a sense of honor, and respect.

Turkey has a wide array of diversity in climate as it’s set between the subtropical and temperate zones. The climate zones in Turkey include the Mediterranean, the Black Sea, the Terrestrial, and the Marmara Climates. Depending on location, residents can have hot, dry summers and cold, rainy winters or the opposite, where temperature differences between summer and winter and day and night are large.

Turkey offers its residents and visitors a great deal of culture and history. Turkey is famous for an assorted mix of both Asian and European components—from the traditional Turkish tea to the majestic Hagia Sophia Grand Mosque. It’s also famous for its huge and elaborate bazaars, beloved destinations such as Istanbul and Cappadocia, and town specialties like baklava and Turkish delights. The Turkish cuisine and the country’s natural beauty give residents and visitors much to chew on and gaze at.

The public transport system in Turkey is reasonably priced and convenient. There are various options for transportation and travel throughout the country, including planes, buses, trains, and subways in major cities.

Turkey is internationally appreciated for its history, welcoming community, and culture. It’s one of the most popular destinations for tourists all year round. If you’re looking for a new place to work or expand your business in between Europe and Asia, Turkey is worth exploring.

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