Overview
Turkey’s SGK adds ~17-22% employer cost, but kıdem tazminatı severance (30 days per year, no cap on years) is the real financial risk. Entity formation for foreign companies takes 4-8 weeks. EOR makes sense until you hit 8-12 employees with a long-term commitment.
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 33,030/month gross (2026) |
| 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 % | ~23.5% (SGK 21.5% + unemployment 2%); effectively ~18.5% 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 |
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 |
Choosing an EOR for Turkey
Provider fees, entity models, and onboarding SLAs change frequently. See our ranked shortlist: Best EOR for Turkey.
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.
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.
Sources
Published list prices, country counts, and entity models link to official provider pages (June 2026). eorHQ scores use our 6-dimension methodology.
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