Hiring in Turkey

Overview

If you are hiring your first 1-10 employees in Turkey, using an EOR is usually the lowest-risk option because onboarding often starts in 2-6 weeks, while entity setup can take several months.

Turkey offers one of the largest and youngest workforces straddling Europe and Asia — 85 million people, median age 33, and a deep pipeline of engineering and business graduates from universities like METU, Boğaziçi, and ITU. Istanbul’s tech scene has matured significantly, with strong talent in mobile development, fintech, and gaming. Salaries in TRY terms have risen sharply to compensate for inflation, but in USD or EUR terms, Turkish talent remains highly cost-competitive: a senior software engineer in Istanbul commands roughly $30,000–$50,000/year equivalent, well below Western European rates.

The employer cost structure is moderately heavy. SGK (Sosyal Güvenlik Kurumu — Social Security Institution) employer contributions total approximately 20.5% of gross salary: 11% pension, 7.5% general health insurance, and 2% short-term insurance (work accident/occupational disease). There’s an additional 5% employer incentive discount available for qualifying employers, bringing the effective rate to around 15.5% in many cases. Beyond SGK, employers owe unemployment insurance at 2% and income tax withholding at progressive rates.

The real financial risk in Turkey is severance (kıdem tazminatı). Turkish law entitles employees to 30 days’ gross salary for every year of service upon qualifying termination — and there is no cap on years. An employee with 15 years of tenure is owed 15 months’ salary. There’s a per-year ceiling on the 30-day calculation (currently around TRY 35,058.58/month), but even at the cap, long-tenured terminations are expensive. This makes Turkey a country where the cost of hiring is moderate but the cost of unhiring is potentially enormous.

Key Employment Facts

Item	Detail
Minimum wage	TRY 22,104.67/month gross (2025, first half)
Working hours	45 hrs/week; overtime premium 50%; weekend work premium 100%
Probation period	Up to 2 months (extendable to 4 months by collective agreement)
Notice period	2 weeks (under 6 months), 4 weeks (6–18 months), 6 weeks (18–36 months), 8 weeks (3+ years)
Severance	30 days’ gross salary per year of service; triggered by employer termination (except for just cause under Art. 25/II), resignation after 1+ year for qualifying reasons, retirement, military service, or death
Paid leave	14 days (1–5 years), 20 days (5–15 years), 26 days (15+ years)
Public holidays	14.5 days
Employer costs %	~22.5% (SGK 20.5% + unemployment 2%); effectively ~17.5% with the 5% incentive discount

Employer Cost

Contribution	Employer Rate	Notes
SGK — Long-term insurance (pension, disability, survivors)	11%	Applied to gross salary up to the SGK ceiling
SGK — General health insurance	7.5%	Same ceiling
SGK — Short-term insurance (work accident, occupational disease)	1–6.5% (typically 2%)	Rate depends on risk classification of the workplace
Unemployment insurance	2%	Applied to gross salary
SGK employer incentive discount	-5%	Available for employers meeting qualifying criteria (timely SGK payments, no outstanding debt)
Total employer cost	~17.5–22.5%	Depending on risk class and incentive eligibility

Hiring Through an EOR

Turkey is a critical EOR market because entity formation for foreign companies is operationally complex: it requires a Turkish trade registry application, notarized documents with apostille, a Turkish bank account, and tax office registration. Total formation timeline runs 4–8 weeks and costs $5,000–$15,000 in professional fees. EOR eliminates all of that.

Major EOR providers cover Turkey — Deel, Remote, Papaya Global, and Multiplier all offer Turkish coverage. Onboarding a Turkish national takes 5–10 business days: the EOR registers the employee with SGK (mandatory within 1 day of start date — late registration triggers penalties), sets up income tax withholding through the Gelir İdaresi Başkanlığı (Revenue Administration), and enrolls them in the unemployment insurance system.

Work permits for foreign nationals require an application through the Ministry of Labor and Social Security’s e-izin system. Processing takes 30–60 days. Turkey applies a foreign worker quota: the number of foreign employees generally cannot exceed 10% of the total workforce, though exceptions exist for certain sectors and executive positions. The EOR’s entity headcount matters here — a small EOR partner entity may have limited quota capacity.

What to watch with Turkish EOR providers. First, currency: the TRY has depreciated dramatically — from roughly 8 TRY/USD in 2021 to 36+ TRY/USD in early 2026. Employees will push for USD-denominated or USD-indexed salaries. The EOR must handle the conversion and manage the FX risk. Some providers lock exchange rates monthly; others use daily spot rates. The difference compounds over a year. Second, severance accrual: smart EOR providers accrue for kıdem tazminatı from day one, even though it’s only payable upon qualifying termination. If the EOR doesn’t accrue, you’ll face an unbudgeted lump sum when the employee leaves. Ask your EOR explicitly whether they accrue severance and whether that accrual is transparent in your invoicing. Third, annual leave tracking: Turkish law’s tiered leave system (14/20/26 days based on tenure) means the employee’s entitlement changes over time. The EOR must track tenure accurately across any provider transitions.

When to Set Up Your Own Entity

Factor	Detail
Entity type	Limited şirket (Ltd. Şti.) — similar to LLC; or Anonim Şirket (A.Ş.) — similar to corporation
Formation time	4–8 weeks
Formation cost	$5,000–$15,000 in professional fees; TRY 50,000 minimum capital for Ltd. Şti. (can be committed, not fully paid up)
Ongoing compliance	Monthly SGK declarations (APHB), withholding tax returns (muhtasar beyanname), quarterly provisional tax, annual corporate tax return, annual activity report
Breakeven vs. EOR	8–12 employees

Turkey’s entity formation is more bureaucratic than most European countries — the notarization requirements, apostille process for foreign documents, and trade registry procedures add weeks to the timeline. But the Ltd. Şti. structure is flexible and well-understood. Companies with 10+ employees in Turkey and a long-term commitment to the market will find own-entity economics compelling, especially given the relatively moderate employer social costs. The ongoing compliance burden is manageable with a local muhasebeci (accountant), who typically charges $300–$600/month.

Termination Rules

Turkey’s Labor Law (Law No. 4857) creates two critically different cost scenarios based on tenure and cause.

Termination with just cause (Article 25/II): Grounds include: employee’s dishonesty or bad faith, sexual harassment or assault, criminal act against the employer or colleagues, disclosure of trade secrets, abandonment of work for 2+ consecutive days without notification, being caught intoxicated or under the influence. Just cause termination can be immediate — no notice period required — and no severance (kıdem tazminatı) is owed. The bar is high; courts scrutinize Article 25/II claims aggressively.

Termination without just cause (Article 17): The employer can terminate for any other reason, including performance concerns, with notice. Notice periods: 2 weeks (under 6 months), 4 weeks (6–18 months), 6 weeks (18 months–3 years), 8 weeks (3+ years). The employer can pay in lieu of notice.

Kıdem tazminatı (severance pay): Triggered by employer termination without just cause, employee resignation for qualifying reasons (military service, marriage for women after 1 year, retirement eligibility), and death. Formula: 30 days’ gross salary per year of service. Per-year ceiling (~TRY 35,058.58/month for 2025 H1) caps the 30-day calculation — not the total years. No cap on years of service. For an employee with 12 years of tenure earning TRY 50,000/month: 12 × 30 days ÷ 30 = 12 months’ salary in severance (at the uncapped TRY 50,000 rate, that’s TRY 600,000 — approximately $16,700).

Job security protections (Article 18): Apply to employees with 6+ months of service at companies with 30+ employees. The employer must demonstrate valid business reasons for termination. If the labor court finds the termination invalid, the employee can choose reinstatement or compensation of 4–8 months’ salary (in addition to severance).

Budget: notice period pay + kıdem tazminatı + any accrued annual leave payout. For long-tenured employees, the kıdem alone can dwarf the notice period cost.

Statutory Benefits

SGK social security: Covers old-age pension, disability, survivors’ benefits, general health insurance, and short-term insurance (sickness, work accidents, occupational disease, maternity). Total employer SGK contribution: approximately 20.5% (11% pension, 7.5% health, 2% short-term). A 5% incentive discount reduces this to ~15.5% for qualifying employers (timely payments, no SGK debt). Unemployment insurance adds 2% employer contribution.

Annual leave: Tiered by tenure: 14 days (1–5 years), 20 days (5–15 years), 26 days (15+ years). Accrues from the first year of employment but can only be taken after completing the first year. Unused leave is paid out on termination.

Sick leave: Short-term sickness (up to 2 days): typically managed contractually. For longer absences, SGK provides a temporary incapacity benefit. The employer is not required to top up the SGK benefit unless the contract specifies otherwise. Employees take a significant income cut during extended sick leave under the statutory minimum — most competitive employers supplement.

Maternity leave: 16 weeks (8 pre-birth, 8 post-birth), extended to 18 weeks for multiple births. Paid at 2/3 of the daily wage base by SGK. The employer is not required to pay salary during maternity leave (SGK pays), but many do as a supplementary benefit.

Severance accrual: Smart EOR providers accrue kıdem tazminatı as an ongoing liability from day one — approximately 8.33% of gross salary per year (1 month/12 months). This is not a current cash cost but a contingent liability that becomes payable on qualifying termination. If your EOR isn’t accruing this, the bill at separation will arrive as an unbudgeted lump sum. Ask explicitly.

Work Visas and Immigration

Most EOR hiring in Turkey involves Turkish nationals. For foreign professionals, the Ministry of Labor and Social Security (ÇSGB) administers work permits through the e-izin electronic system. The EOR entity applies as the sponsoring employer — Turkish citizens cannot self-sponsor a work permit.

Requirements: Applicant must have resided in Turkey for 6+ months on a residence permit, or apply from abroad (International Work Permit). The employer (EOR entity) must meet the ratio requirement: at least 5 Turkish employees per foreign worker in the entity. The entity must have minimum registered capital of TRY 100,000 or annual turnover of TRY 800,000. The salary must be at least the minimum wage (TRY 22,104.67/month for 2025); management-level roles require higher documented salaries.

Processing: Applications filed in Turkey (for existing residents): approximately 30–45 days. Applications filed abroad: the foreign ministry approval takes 10 business days, then embassy processing adds 1–3 weeks. Total for abroad applications: 30–60 days.

Work permits are valid for 1 year initially, renewable for 2 years, then 3 years. They are tied to the sponsoring employer and job category — a change in EOR requires a new permit application.

10% foreign worker quota: The number of foreign employees generally cannot exceed 10% of total Turkish workforce at the entity. This quota is per entity. A small EOR partner with 40 Turkish employees can host only 4 foreign workers across all its clients. Confirm the EOR’s current quota availability before committing.

Permit Type	Who It’s For	Processing Time
Work Permit (in Turkey)	Existing residents with qualifying offer	30–45 days
International Work Permit (abroad)	Applicants outside Turkey	30–60 days
Intra-Company Transfer	Senior managers/specialists from group entities	30–45 days

Frequently Asked Questions

How does Turkey’s severance (kıdem tazminatı) actually get calculated, and can I avoid it?

The calculation is simple but the bill can be steep: 30 days’ gross salary for each completed year of service, pro-rated for partial years. The per-year amount is capped at a ceiling updated quarterly (approximately TRY 35,058.58 as of January 2025). Severance is triggered by: employer termination without just cause (Art. 17), employee resignation for just cause (Art. 24), retirement, military service, or death. It is NOT triggered by employee voluntary resignation (without just cause) or employer termination for just cause under Art. 25/II (serious misconduct). You cannot contractually waive kıdem tazminatı — it’s a mandatory entitlement. The only ways to manage the exposure are: keep tenure short through fixed-term contracts (limited to objective justifications), negotiate mutual termination agreements that include severance at a discount, or simply budget for it as a cost of doing business in Turkey.

What are the biggest compliance risks for turkey?

Treat this as a practical hiring decision: prioritize compliance execution quality, onboarding reliability, and transparent costs in your target countries. Shortlist providers that can show clear country-level accountability, not just broad coverage claims.

Hiring in Turkey: EOR Guide & Compliance Overview