Taxes and payrolls: the labour market in Turkey
Each labour market has some peculiarities. It may be tricky for foreigners to understand fully the payment methods, the taxes and other benefits related. In TalentUp we are starting a series of different blog articles, one for each country. This article analyses the labour market in Turkey.
Even if the national currency is the Turkish Lira (TRY), the whole article is in EUR to compare easily across countries and exchange rates.
General data about the Turkish labour market
| Minimum wage | 464.54€ |
| Payment basis | Monthly |
| Payment | Must be paid by the last day of the month |
| Maximum working hours a week | 45h |
| Maximum overtime hours a week | 3h |
| Maximum overtime hours a year | 270h |
| Working hours compensation | 150% pay rate on a weekday and 200% pay rate on the weekend |
Payroll taxes in Turkey
Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.
| Contingencies | Employer % | Employee % |
| Short-Term Insurance Branch Premium | 2 | |
| Pension & Disability | 11 | 9 |
| General Health Insurance | 7.5 | 5 |
| Unemployment Insurance | 2 | 1 |
| Total | 22.5 | 15 |
Upper limit of Social Security Base: 3,484.06€
Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries.
| Gross salary | Income tax % |
| Up to 2,424.08€ | 15 |
| From 2,424.08 to 5,194.45€ | 20 |
| From 5,194.45 to 12,812.99€ | 27 |
| From 12,812.99 to 65,796.42€ | 35 |
| Above 65,796.42€ | 40 |
Contingencies from self-employees
A self-employed individual is obligated to make advance payments on income tax that will be offset on filing an annual report. The advance payments will be made 4 times in each year. The standard rate for payments in advance of income tax in Turkey is 15% of the net profit.
Example of net salary in Turkey
As a reference, we use the average salary of a software engineer. In Turkey, on average, software engineers earn annually 24,200€.
| Employer | Employee | |||
| % | € | % | € | |
| Gross salary (annually) | 24,200 | |||
| Short-Term Insurance Branch Premium | 2 | 484 | ||
| Pension & Disability | 11 | 2,662 | 9 | 2,178 |
| General Health Insurance | 7.5 | 1,815 | 5 | 1,210 |
| Unemployment Insurance | 2 | 484 | 1 | 242 |
| Total | 22.5 | 3,484.06€* (the maximum) | 15 | 3,484.06€* (the maximum) |
| Income tax | 5,740.72 | |||
| Net salary (annually) | 14,975.22 |
The employer contributes 3,484.06€ to social security and the employee 3,484.06€.
After paying the income tax, the employee has a net salary of 14,975.22€ coming from a gross salary of 24,200€.
Unemployment regulation in Turkey
In Turkey, the notice period is dependent on the employee’s length of service as below:
| Time worked | Notice period |
| Less than 6 months | 2 weeks |
| Between 6 and 18 months | 4 weeks |
| Between 18 and 36 months | 6 weeks |
| More than 36 months | 8 weeks |
Employees are entitled to severance pay upon completing one year with the same employer. Severance pay is calculated as the monthly wage multiplied by each completed year of employment.
The probation period usually lasts for 2 months and no notice period is required.
Different kinds of leaves in Turkey
Paid annual leave depends on the years worked. It ranges from 14 to 26 days. Moreover, there are 14 public holidays. However, if they fall on weekends, they are lost.
Religious holidays are determined by the lunar cycle and will show as ‘tentative’ until they are confirmed nearer the date of the holiday.
Employers are not strictly obligated to provide payment to employees during sick leave. However, typically, employees receive compensation from Social Security after a three-day sick leave period. In practice, many employers choose to pay their employees their regular salary for the first two days of sick leave, which are not covered by Social Security, or for the entire duration of the sick leave. They may then receive a partial refund when Social Security reimburses them.
If an employee’s sick leave extends beyond six weeks beyond the notice periods outlined in labor law, the employment contract may be terminated without prior notice. This is in accordance with Article 46(c) of the Turkish Labor Code.
Parents are also entitled to up to 10 days of leave to attend treatment/medical appointments for a child with a disability or chronic disease.
More over, there is a bereavement leave of 3 days and a ilitary leave of 90 days, both paid leaves.
Paid parental leave
Maternity leave lasts for 16 weeks (18 in multiple or complicated births) at full pay. Usually, they are 8 weeks before and 8 weeks after birth, but it can also be three before and five after.
Depending on how many children the employee has (in total), employees can work some months part-time after their leave. It goes from 2 months to one year.
The father/partner is entitled to 1 week of paid paternity leave after the child’s birth.
If both parents are employed, they are entitled to work part-time until the child starts primary school.
Other common Turkish benefits
| Benefit | % of companies with this benefit |
| Professional Development | 17.1 |
| Diversity | 14.6 |
| Cutting Edge Technology | 9.8 |
| Equal Opportunity Employer | 9.8 |
| Great Team | 7.3 |
How to employ a Turkish worker
To hire in Turkey, you need to be a registered company. And for this, you need:
- A title of company and Articles of Association (AoA),
- Personal information and passport copies of the shareholders and directors,
- Proof of address for the shareholders and directors,
- Proof of the capital amount, its source and existence,
- Tax Identification Numbers (TIN) for the shareholders and directors,
- A Registration and Commercial Activity Certificate.
Some platforms (Papaya Global among them) offer the Employer of Record (EoR) service helping companies hire countries where they do not have any office.
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