Turkey

A legal entity is required to employ workers in Turkey. The most common forms are:

• Limited Liability Company (Ltd.)
  
  
• Joint Stock Company (A.Ş.)
  
  
• Liaison office (limited functions, no commercial activity)
  
  

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.

It is possible to establish a company in a single day by applying to the relevant trade registry office with the required documents.

Company Establishment Procedures include:

• 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
  
  
• Permit or letter of compliance for companies whose incorporation is subject to approval by the relevant ministry or authority
  
  
• Registration with the Tax Office — legal books are certified by a Public Notary. The rent contract must be certified by the Notary Public
  
  

Companies must be registered with:

• Trade Registry
  
  
• Social Security Institution (SGK)
  
  
• Turkish Revenue Administration
  
  
• Turkish Employment Agency (İŞKUR)
  
  

An in-country bank account must be opened to process payroll and tax remittances.

The standard workweek is 45 hours. Daily working time cannot exceed 11 hours.

Weekly hours may be divided differently by mutual consent. Sunday is a rest day, but work is allowed with a permit.

Overtime is limited to 270 hours/year per employee and paid at a premium of 50% or exchanged for 1.5x time off.

Employees are entitled to at least 24 hours of weekly rest and 1.5 hours of meal/rest breaks per day.

All employment contracts must be written and signed. If not, the burden of proof lies with the employer in any legal dispute.

Working Week

• Up to 45 hours/week, generally Monday to Saturday
• Sunday is the rest day by default

Employment Law

• Annual Leave:
  • 1–5 years: 14 days
  • 5–15 years: 20 days
  • 15 years: 26 days
• Maternity Leave: 16 weeks (18 weeks for multiple births); additional 6 months unpaid possible
• Paternity Leave: 5 days
• Sick Leave: 15 days paid by employer; then by Social Security
• Other Paid Leave:
  • Marriage/adoption: 3 days
  • Bereavement: 3 days
  • Disabled child care: 10 days

National Service

Not mandatory for all, but government provides leave and job security for conscripts.

Income Tax

Personal Income Tax (PIT)

PIT is progressive from 15% to 40% depending on income level.
Employers are responsible for monthly withholding and remittance to the tax office.

Social Security Contributions (2024)

Total:

• Employer: ~22.5–23%
  
  
• Employee: ~15%
  
  

The Minimum Living Allowance (AGI) was abolished in 2022. Instead, minimum wage earnings are now tax-exempt.

Progressive tax rates (2024):

• 0–110,000 TRY: 15%
• 110,001–230,000 TRY: 20%
• 230,001–580,000 TRY: 27%
• 580,001–3,000,000 TRY: 35%
• Over 3,000,000 TRY: 40%

Social Security Contributions

• Employee: 15%
• Employer: 22.75%
• Total: 37.75%
• Components: Pension, health, unemployment, accident insurance

Deadlines

• Withholding Tax + SSI combined and submitted via MUHSGK online form by 26th of following month

Payroll Process

• Payroll is processed monthly. The employer must:

  • Provide itemised payslips
    
    
  • Calculate net salary using gross-to-net method
    
    
  • Submit monthly declarations to SGK and tax office
    
    
  • Pay taxes and contributions by the 26th of the following month
    
    

  Withholding tax and monthly premium service document (MUHSGK) must be submitted online to the tax office by the 26th.

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

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

  Payroll records must be retained for 10 years.

Reporting

• Monthly e-declarations (MUHSGK)
• New hire and termination reporting to Social Security Institution (SSI)

Employers must:

• Register the employee with SGK at least one day before employment
• Notify İŞKUR of new employment
• Provide written employment contract
• Conduct mandatory health and safety training
• Register foreigners with the Ministry of Labour for work permits
  
  

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

• Company Number
• Employee Number
• Title
• Initials
• Full Name
• Gender
• Marital Status
• Nationality
• Date of Birth
• Disability Status
• ID Number
• Tax Number
• Bank Name and Account
• Account Type
• Income Tax Reference
• Social Security Number
• Cost Centre
• Address
• Start Date
• Job Title
• Salary
  
  

Expat new starts are required to provide:

• Passport
• Residence permit
• Six photographs
• Diploma
• Employer documents
  
  

Termination

Notice periods vary:

• 2 weeks (<6 months)
• 4 weeks (6–18 months)
• 6 weeks (18–36 months)
• 8 weeks (>3 years)
  
  

Notice periods can be substituted by payment in lieu.

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

Employees terminated without just cause are entitled to severance pay:

• One month’s gross salary per year of service
  
  

Termination indemnity is capped (e.g. 2021 = 7,638.96 TRY)

Minimum Wage (2025)

• TRY 17,002 gross/month
• TRY 13,414 net/month
  
  

Annual Leave

• 14 days (1–5 years of service)
• 20 days (5–15 years)
• 26 days (15+ years)
• 20 days minimum for workers <18 or >50
  
  

Additional Leave Entitlements

Sick Leave

Paid by employer for up to 2 days.
From day 3, paid by SGK (subject to doctor’s report).
Medical reports must be logged to SSI immediately after end of sick leave.
If the employee is on leave for over 15 days, he/she shall be entitled to a year of work stability.

Accident at work: employer pays first 15 days, government pays rest.

Maternity & Paternity Leave

• Maternity: 16 weeks (8 before, 8 after birth)
• Paternity: 5 days
• Right of the mother to have six months unpaid leave after childbirth granted to either spouse or adopter
• Additional unpaid leave entitlements based on disability of child
• When the mother starts working, she has the right to use 1.5 hours per day for breast-feeding. The breast-feeding leave period is for the 1st year of the child and this leave may be used as total (by adding the hours/ working hours).
• Once maternity leave has ended, working women (or the male/female adopter of a child under 3) can reduce their working time by half for up to 60 days for the first child, 120 days for the second child and 180 days for the third child.
• Any one of the working parents can reduce their working hours by half until the child begins school.
• If the mother dies during or after childbirth, the father can use any remaining unused leave.
  
  

Other Benefits

• Meal, transport, and housing allowances (subject to limits)
• Holiday bonuses (not mandatory)

Private health insurance (optional but common for white-collar staff)

Non-Turkish nationals must obtain a work permit and residence permit.

Steps:

1. Employer submits online application to Ministry of Labour
2. Foreign worker submits application to Turkish consulate
3. Approval granted jointly
4. Work permit issued: valid for 1 year, renewable

It may take up to two months to receive a residence permit.
It is illegal to leave Turkey before receiving the residence permit; doing so results in a fine.

Applicants must register with the police near their residence before starting work.

The Work Permit Exemption Confirmation Document also counts as residence permit.

Required documents:

• Passport
• Residence proof
• Diploma/qualification
• Employment contract
• Employer company documents

Permit must be renewed 60 days before expiry.

• 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.