Employer of Record in Turkey

Why can a company not employ directly in Turkey?

Employing someone in Turkey requires a Turkish-registered employer, because the employment relationship is administered through a workplace registration with the Social Security Institution, known by its Turkish initials SGK. A company with no Turkish presence has no workplace registration, so it has nothing to register the employee against and no way to remit the monthly contributions the law requires.

The registration is the constraint, not the contract. A foreign company can agree terms with a Turkish national in an afternoon. What it cannot do is declare that person to SGK or produce the monthly SGK filings that prove the employment is properly registered. Those obligations attach to a registered employer in Turkey and the payroll withholding follows from the same registration.

That leaves two routes: use an entity that already holds the registration, which is what an Employer of Record provides, or create one by incorporating. Employment itself runs under Labour Law No. 4857 either way, supplemented by the Code of Obligations for certain categories of staff and, for foreign nationals, by International Labour Force Law No. 6735.

What does an employer actually pay for in Turkey?

Beyond gross salary, the employer cost of a Turkish hire in 2026 is social security at 21.75% plus 2% unemployment insurance, less the Treasury-supported discount, together with a severance liability that accrues from the first completed year of service.

At the 2026 minimum wage of TRY 33,030 gross, the all-in monthly employer cost for a non-manufacturing employer is approximately TRY 40,214. Against a net minimum wage of TRY 28,075.50, that is the clearest illustration of the market's central budgeting trap: a company that plans from the net figure the employee sees understates its own cost by roughly 43%.

Severance sits outside all of this and is the liability most often left off a budget. It runs at 30 days of gross pay for each year of service and the monthly salary used in the calculation is capped at TRY 73,729.87 from 1 July 2026.

The shape of it catches people out. Nothing is owed below one year of service, but the calculation runs from the start date, not from the anniversary, so the moment a year completes the liability is a full 30 days' pay rather than nothing. An employee with eighteen months' service carries a 45-day liability wherever severance is triggered. Treating it as a cost that begins in month thirteen understates the position by a full year at every point afterwards. The base is also the loaded gross, salary plus regular contractual benefits, rather than bare salary.

Whether it is ever paid depends on how the employment ends. Severance is due on employer termination other than for serious misconduct and on resignation for a justified reason such as retirement eligibility or military service, but not on an ordinary resignation. That makes it an accrued liability against a contingent entitlement rather than a certainty, which is an argument for reserving against it rather than for ignoring it.

Maternity leave runs to 24 weeks, 8 before birth and 16 after, or 26 weeks for multiple births, and is paid by SGK rather than the employer, so it does not carry a direct payroll cost. The post-natal period doubled on 1 May 2026, so a company working from guidance written earlier will plan for 16 weeks and be eight weeks short.

What changed for Turkish employers in 2026?

Law No. 7566, published in the Official Gazette on 19 December 2025 and in force from 1 January 2026, raised the employer rate and cut the discount at the same time. A cost model built on 2025 figures understates a non-manufacturing employer's position on two separate lines.

The ceiling change is the one that bites hardest on senior salaries. Raising the base from seven and a half times the minimum wage to nine times adds TRY 49,545 of contributory pay a month at the 2026 minimum wage. Set against the 2025 ceiling the monthly cap rose by roughly TRY 100,000 in total, part the multiple change and part the 27% minimum wage rise, so the cost of a well-paid hire went up considerably more than the one-point premium increase suggests on its own.

Manufacturing employers under NACE Rev. 2.1 Section C kept the five-point discount to 31 December 2026, with scope for it to be extended by a further year. Non-manufacturing employers did not and that divergence is now the single largest structural difference in employer cost between two otherwise identical Turkish businesses.

Why does a Turkish employee's net pay fall through the year?

Turkey applies its income tax bands cumulatively across the calendar year rather than at a flat monthly rate, so an employee on an unchanged gross salary takes home less in November than in February.

As year-to-date earnings accumulate, the employee crosses from the 15% band into 20%, then 27%, 35% and eventually 40%, and the withholding rises with each crossing. The bands reset on 1 January and the cycle starts again. For 2026 the wage-earner thresholds are TRY 190,000, TRY 400,000, TRY 1,500,000 and TRY 5,300,000 of cumulative income.

This is lawful and entirely normal in Turkey and it is the single most common source of confusion for a foreign employer hiring there for the first time. It has two practical consequences. New hires who were quoted a monthly net figure will query their payslip within months unless the effect is explained at offer stage. And any commitment to a fixed net salary transfers the whole of that escalating tax burden onto the employer, whose cost then rises through the year while the employee's take-home stays flat.

What does it take to employ a foreign national in Turkey?

Employing a foreign national in Turkey is materially harder than employing a Turkish one and the barriers sit with the sponsoring employer rather than with the individual.

The Ministry of Labour and Social Security publishes the evaluation criteria and three of them decide most applications. The workplace must employ at least five Turkish citizens registered with SGK for each foreign worker requested, tested separately for each one. The sponsoring company must hold at least TRY 500,000 in paid-in capital if it is newly established, or, if it is already trading, meet that or an alternative test of TRY 8,000,000 in net sales or USD 150,000 in exports. And the role must pay a minimum salary set as a multiple of the minimum wage by occupation category.

Businesses with annual net sales of TRY 50,000,000 or more are released from the local employment ratio for up to five foreign workers and since 3 August 2026 a foreigner already lawfully in Turkey for one of the last three years clears both the employment and financial tests, capped at three such hires. Neither helps a business bringing its own people in from abroad: the first needs a trading year in Turkey and the second covers only in-country applications for a foreigner already resident and only while foreigners do not outnumber Turkish staff at the workplace.

Further exemptions sit outside the general criteria and are easy to miss. Roles such as software development, database, mobile software, systems network and security and enterprise architecture are, as a rule, not tested on the employment and financial criteria, uncapped inside an IT-sector business and limited to two hires outside one. Work covered by a provision in a bilateral or multilateral agreement Turkey is party to, or under a public institution's contract or tender including all subcontractors, is exempt from the employment and financial criteria whatever the occupation. Manufacturing employers may take one extra foreign worker for every five Turkish citizens at a branch. Poultry and recycling employers have the same allowance for animal-care and collection roles. Both reliefs lift the headcount ratio only and run to 31 December 2027. Certificated tourism businesses employing ten Turkish citizens are released from the ratio altogether. Research, development and design staff are exempt from the employment and financial criteria where the company holds an R&D or design centre certificate under Law No. 5746 and anyone working inside a technology development zone under Law No. 4691 is exempt whatever their role, in both cases where the Ministry of Industry and Technology gives a favourable opinion. Exemptions also attach to the individual: eight years' lawful residence in Turkey, three years' marriage to a Turkish citizen, a Turkish parent or child, or long-term residence.

Engineering and architecture are named once in the criteria, in the wage table that sets them at four times the minimum wage and no sector or occupation heading is written around them or around site management. Relief there has to come from something other than the job title, usually from the contract the work sits under or the sector of the workplace, which is why the criteria bite hardest on privately funded industrial deployments and barely at all on the same roles delivered through a public tender.

Applications are filed through the e-İzin system. The statutory standard under International Labour Force Law No. 6735 is that a properly completed application is concluded within thirty days of a complete file and a document deficiency can postpone that by up to thirty days more. Plan around the document preparation and, for someone applying from outside Turkey, the consular step either side of that window rather than around the thirty days alone. The salary thresholds are not a one-off test at hire: they must be maintained for the life of the permit.

How often do Turkish employment figures change?

On three separate cycles, which is what makes planning a Turkish payroll different from planning most others.

The minimum wage, the income tax bands and the SGK floor and ceiling reset annually on 1 January. The severance ceiling resets every six months, which is why it moved from TRY 64,948.77 to TRY 73,729.87 on 1 July 2026 while nothing else did. And a mid-year minimum wage revision can be announced at any point if inflation runs ahead of forecast, which has happened repeatedly in recent years.

The compounding effect is what makes Turkey unusual. Because the SGK floor is the minimum wage, the ceiling is nine times it and the work permit salary thresholds are one to five times it, a single unscheduled revision moves social security cost, work permit eligibility and net pay in the same month.

For the full statutory detail behind all of this, including contracts, working time, leave, termination and the 2026 cost reference table, see the complete guide to hiring employees in Turkey. For the structural decision between using an Employer of Record and incorporating, see EOR or a Turkish entity.