Our guide to Payroll in Turkey

Doing Business in Turkey

Investing in Turkey

The Turkish government welcomes inward investment from foreign multinational corporations. Government policy including low levels of taxation and attractive incentives provide a welcoming environment for investors. Turkey has a developed infrastructure and stable political environment that further supports investment opportunities.

Basic Facts about Turkey

General Information

Full Name: Republic of Turkey

Population: 85.8 million (World Bank, 2023)

Capital: Ankara

Major Language: Turkish

Monetary Unit: Turkish Lira (₺)

Main Exports: Clothing and textiles, fruit and vegetables, iron and steel, motor vehicles and machinery, fuels and oils

GNI per Capita: US $11,650, (World Bank, 2023)

Internet Domain: .tr

International Dialing Code: +90

How to say

Hello: merhaba

Good morning: günaydın

Good evening: iyi geceler

Do you speak English? İngilizce biliyor musunuz?

Good bye: elveda

Thank you: teşekkür ederim

See you later: sonra görüşürüz

Registrations and Establishing an Entity

The main goal of the New Turkish Commercial Code (TCC) is to develop a corporate governance approach that meets international standards; to foster private equity and public offering activities; to create transparency in managing operations; and to align the Turkish business environment with EU legislation, as well as for the accession process.

A legal entity must be established in Turkey in order to process a payroll. Turkey's regulatory environment is extremely business-friendly. You can establish a business in Turkey irrespective of nationality or place of residence.

Company Establishment in One Day

It is possible to establish a company in a single day by applying to the relevant trade registry office with the required documents. The company is established once the founders declare their intent to set up a joint stock company in the articles of association, which have been issued in accordance with the law, and where they, with their notarized signatures, unconditionally acknowledge and undertake to pay the whole capital. The company receives its “legal entity” status upon registration with the trade registry.

Types of Companies

Incorporated companies include:

• Joint-stock company (A.Ş.)
• Limited Liability Company (Ltd. Şti.)
• Commandite company
• Collective company
• Cooperative company

Joint Stock Company

The company’s stock capital is divided into shares and the liability of the shareholders is limited to the subscribed capital and paid by the shareholder. At least one shareholder (real person or legal entity) and a minimum capital of TRY 250,000 are mandatory. The mandatory company shall include a general assembly and a board of directors.

Limited Liability Company

A company established with at least one shareholder (real person or legal entity) and the liability of the shareholders is limited to the subscribed capital and paid by the shareholder. A minimum capital of TRY 50,000 is mandatory.

Commandite Company

A company established to operate a commercial enterprise under a trade name. Whereas the liability of some shareholders is limited to the capital subscribed and paid by the shareholder (commanditer), for some shareholders there is no limitation of liability. Legal entities can only be commanditer. No minimum capital is required. The rights and obligations of the shareholders are determined by the articles of association.

Collective Company

A company established to operate a commercial enterprise under a trade name and, the liability of none of the shareholders is limited only to the capital subscribed and paid by the shareholder. No minimum capital is required. It is mandatory that all the shareholders be real persons. The rights and obligations of the shareholders are determined by the articles of association.

Company Establishment Procedures

Three copies of articles of association (one copy original) which are notarized are prepared. Following the notarization of articles of association, within 15 days at the latest and application to the relevant trade registry office with the documents set below is needed.

Documents for the Company Establishment

• A company establishment petition and a notification form duly filled in and signed by persons authorized to represent the company. The list of the documents to be procured, and forms to be filled can be downloaded at www.sanayi.gov.tr and www.hazine.gov.tr
• Articles of association including notarized signatures of founders and notary certification proving that all shares constituting the registered capital have been subscribed by the founders in the articles of association
• Founders’ statement signed by the founders
• The bank letter proving that the share capital has been deposited
• The bank receipt indicating that 0.04% of the company capital has been deposited to the account of the Turkish Competition Authority at a state bank
• Permit or letter of compliance for companies whose corporation is subject to the permit or letter of compliance issued by the relevant ministry or other official institutions
• Notarized copy of signatures of persons with the authority to represent and bind the company
• Application number indicating that the trade name to be used has been checked and confirmed by the Trade Registry Office
• Company establishment statement form (3 original copies)
• Certificate of residence of founding partners
• Notarized translation of passport in the case of the foreign shareholder being a real person; apostilled and notarized translation of registry document issued by the competent authority in case the foreign shareholder is a legal entity

Registration with the Tax Office

Please note, corporate entities require an office address to be registered with the tax office on the same day or before the registration date. A tax registration number is received and legal books are certified by a Public Notary. The rent contract must be certified by the Notary Public as well as the notarised Circular of Signatory which should be submitted to the related Tax Office.

The registrations of the company for payroll purpose with the Tax and Social Security Institute are completed during the legal entity establishment process.

It is worth mentioning that having the “umbrella service” which some payroll provider’s offer can be a solution for processing payroll without a legal entity in Turkey.

Banking

Employee salaries must be deposited into employee bank accounts no later than the agreed pay date. If the foreign bank has a branch in Turkey, it will be easier for the transmission of payment.

Banks are open Monday to Friday and closed on weekends.

Working Week

Employees in Turkey can work a maximum of 45 hours per week, generally spread over six days of the week so as not to exceed seven and a half hours per day. By mutual consent, weekly working time may be divided differently. Sunday is rest day in Turkey, however some workplaces allow employees to work on Sundays with a permit. Lunch breaks are usually one hour. The official work week in Turkey is between Monday to Saturday.

Employment Law

Holiday Accrual / Calculations

Employees working under an open‑ended employment contract are entitled to paid annual leave based on their length of service with the employer, as follows:

• 1 to 5 years: 14 working days
• 5 to 15 years: 20 working days
• More than 15 years: 26 working days

Employees under the age of 18 and aged 50 or over are entitled to a minimum of 20 working days, regardless of length of service.

Use and Payment of Annual Leave

• Paid annual leave must be taken in kind and cannot be replaced by cash payments while employment continues.
• Unused accrued annual leave must be paid to the employee upon termination of employment, regardless of the reason for termination

Unpaid Road Leave

If an employee takes at least 14 consecutive days of annual leave and spends this leave outside the location of the workplace, the employee may request up to 4 days of unpaid leave for travel purposes.

• The employee may be required to provide supporting documentation.
• This leave is unpaid unless the employer chooses otherwise.
• This entitlement applies only when annual leave is taken consecutively and outside the work location.

Maternity Leave

• 16 weeks of paid maternity leave (8 weeks before and 8 weeks after childbirth)
• 18 weeks in the case of multiple pregnancies
• Upon request, the employee may take up to 6 months of unpaid leave following the statutory maternity leave period

Breastfeeding Leave

• Employees are entitled to 1.5 hours per day of breastfeeding leave until the child reaches one year of age
• This time may be used collectively (by combining hours), subject to coordination with the employer

Half-Time Work After Childbirth or Adoption (State-Compensated)

Following maternity leave (or adoption of a child under age 3), one parent may work half-time for a limited period, with non-worked hours compensated by the State (İŞKUR):

• First child: 60 days
• Second child: 120 days
• Third child: 180 days
• Employer pays salary for hours actually worked.
• State compensates non-worked hours.
• A formal application is required.

Part-Time Work Until School Age

After the above half-time period expires, either parent may request part-time work until the child begins compulsory primary education.

• Employer must approve the request.
• Salary is paid only for hours worked.
• No state wage compensation applies.
• Same rights apply to adoptive parents.

Paternity Leave

Employees are entitled to 5 days of paid paternity leave upon the birth of their child

Sickness

• Medical reports must be submitted to the SSI (SGK) system.
• Temporary incapacity benefits are paid by the SSI, generally starting from the third day of incapacity.
• The employee must be insured (or a dependent/pensioner) to qualify.
• Medical treatment continues until recovery

Work Accidents and Occupational Diseases

• In the event of a work accident or occupational disease, SSI pays benefits from the first day of incapacity.
• There is no waiting period.
• No statutory rule grants automatic “one-year job stability”; however, general job-security and invalid-termination protections apply

Other Leave of Absences with Pay

Employees shall be allowed to take a leave of absence with pay in the event of the below.

Remuneration of above leaves shall be paid by the employer, and such leaves shall be regarded as worked in computation of the length of service required to qualify for paid annual leave.

Tax, Employee Provident Fund, Social Security & Human Resource Development

The tax year runs from 1st January to 31st December. While employee cumulative tax bases start from zero at the beginning of the year, social security bases do not.

Minimum Wage

The minimum wage in Turkey is determined by the Minimum Wage Determination Commission and generally announced at the end of each year. It is used as the basis for calculating employee and employer social security contributions and other statutory thresholds.

As of 1 January 2026, the gross monthly minimum wage is TRY 33,030 (net TRY 28,075.50). The minimum wage is exempt from income tax and stamp tax and also serves as the reference for the social security contribution base and related statutory limits.

Income Tax

Income tax is withheld at source from employees’ gross income (cash or in kind) earned in return for employment. Withheld income tax and social security premiums are declared together through the Withholding Tax and Monthly Premium Service Declaration (MUHSGK), which has been mandatory nationwide since 1 July 2020.

Declarations and payments must be submitted electronically to the tax office by the 26th of the following month. Late filings or payments are subject to penalties and late‑payment interest.

Tax Rates

Income corresponding to the statutory minimum wage is exempt from income

Social Security

Monthly social security contributions (SGK) must be declared electronically via the MUHSGK system by the 26th of the following month. Premium contribution amounts must be paid to the Social Security Institution (SSI) by the last day of the following month. Late submissions or payments are subject to administrative penalties and late‑payment interest.

As of 1 January 2026, social security contribution rates are as follows:

Total statutory contributions amount to 15% for employees and 23.75% for employers (38.75% in total).

Under Law No. 5510, eligible employers may benefit from a Treasury‑supported premium incentive. For the manufacturing sector, a 5‑point reduction applies to the employer’s long‑term insurance contribution. For non‑manufacturing sectors, this incentive is limited to 2 points as of 2026. Employers who fail to file declarations or pay premiums by the statutory deadlines lose the incentive for the relevant month

Reporting

Monthly

All reporting in Turkey is done monthly. There are no additional quarterly or year-end procedures.

• New Social Security Institution (SSI) registrations
• Declaration of missing days
• E-Declarations (Social Security - 26^th of the month)
• Reports (common reports i.e. payroll reports, GL, payroll summaries, payslips etc.)

Payroll

It is legally acceptable in Turkey to provide employees with online payslips upon the receipt of written approval from the employee.

Reports

The retention period for payroll data is 10 years.

Payslip Example

Local language example:

English language version of a payslip:

New Employees

The employer must notify authorities of new starts immediately by submitting a notice of employment. The registration for a new start should be filed online on the SSI (Social Security Institution) registration website. The new employee should be registered one day before their start date (working day) at the latest. The employees cannot be paid legally without registration; it can take up to a month and a half for all of the registrations to be completed.

The table below outlines the information required to set up a new start:

Expat new starts are required to provide the following documentation:

• Passport
• Permit residence (original and copy, this should be taken from the Foreign Branch of the District Police Headquarters)
• Six small passport style photographs
• Diploma
• Contract
• Application form from Labour Ministry
• Employer address from General Directorate of Population and Citizenship Affairs
• Copy of employer’s ID card
• Employers’ e-state code

Leavers

All leavers should receive their final pay on their termination dates. Some employers form an agreement with their departing employees to make the final payment on a date other than termination. Whilst this is generally frowned upon, it is a common practice among employers.

Employee terminations must be reported within 10 days by filling in the online form on the SSI portal.

Employer terminations incur a termination indemnity depending on the duration of the employee’s time with the employer. The payment is calculated as taking the latest salary as the base and making 1 month’s salary worth of payment to the employee for each year the employee fulfilled. However, there is a maximum termination indemnity amount decided for each 6-monthly period. The amount for the first half of 2021 is 7638,96 TRY.

By mutual agreement, both parties can terminate the employment if it is an open-ended employment contract, under the condition that the required notice period is given. The notice period will depend on the number of months the employee has worked for a company, as shown below:

Notice periods can be substituted by payment in lieu. The employer may terminate the employment contract by paying in advance the wages corresponding to the term of notice.

During the term of notice the employer is obligated to give the employee at least two working hours per working day as job searching leave, as well.

Under certain circumstances, the employer and employee can terminate the employment agreement without notice.

Employee Benefits

Expenses

Business-related expenses such as general expenses, travel costs, mileage, and company-related purchases are not processed through payroll. These expenses are handled by the accounting department and reimbursed based on valid supporting documentation in accordance with Turkish tax regulations.

Only documented business expenses are reimbursed as expenses. Payments that constitute personal benefits or allowances without adequate documentation may be treated as remuneration and processed through payroll in accordance with tax and social security rules.

Other common expenses:

• Expenses associated with business meetings (e.g. transportation, meals, accommodation)
• Telephone and communication expenses, provided invoices are issued in the company’s name
• Computers, work equipment, and other business-use assets
• Expenses incurred exclusively on behalf of the company

Minimum Living Allowance

Asgari Geçim İndirimi (Minimum Living Allowance) is not applied as of 01.01.2022. With new regulation, minimum wage has been excluded from tax as of January 2022. In addition, the employees whose salaries over the minimum wage are exempt from income and stamp tax for the amount that corresponding to minimum wage. With this regulation, every employee will be subjected minimum wage income and stamp tax exemption.

Visas & Work Permits

Should an individual wish to work in Turkey, they must apply for a work permit and visa at the nearest Turkish diplomatic mission no later than a month before they are scheduled to arrive in Turkey.

To apply, an individual will have to provide the following documentation:

• Passport
• Visa application form
• Letter from the employer you intend to work for

The employer should submit various additional documents to Turkey's Ministry of Labour and Social Security (MLSS) within three working days after the individual applies for their work permit and visa. Applications are finalised by the MLSS within ninety days at the latest.

An individual must register with the police in Turkey near where they intend to live to acquire the necessary Residence Permit. This must be done before starting work in Turkey, and one month after arrival in Turkey at the latest.

It may take as long as two months for a Residence Permit to be sent to the individual once they have applied for it. Until an individual has received the Residence Permit, they may not leave Turkey. It is illegal to leave Turkey without having the Residence Permit, if an individual does leave without first having obtained their Residence Permit the consequence is generally a substantial fine.

A valid work permit, as well as the Work Permit Exemption Confirmation Document, is considered as residence permit.

• Minimum wage is updated twice annually
• Employees may receive meal cards or vouchers (max TRY 170.00/day tax-free)
• Payroll software must be integrated with E-bildirge (SGK’s online portal)
• The official currency is Turkish Lira (TRY), formatted as 1.000,00
• The week runs Monday–Friday; working Saturday requires extra pay or compensatory time
• Employers with ≥50 staff must hire at least 3% disabled worker
• Employment legislation: Turkish Labour Law No. 4857
• Payroll and employment records must be archived for 10 years
• Umbrella payroll providers may be used to process payroll without a legal entity
• Banks are open Monday to Friday; closed on weekends

Further Information

For more information, or assistance with Turkey tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.