Establishing and managing payroll in Turkey
Turkey’s convenient location between Europe and Asia, large population, and diversified economy all make it an attractive place to expand a business.
If you are interested in expanding your organization into Turkey’s exciting marketplace, then an important step is likely to be setting up a Turkish payroll and start hiring a workforce locally. This process can be long and difficult, potentially causing delays to your expansion and incurring unexpected expenses.
At Horizons, we specialize in providing Turkey payroll outsourcing to foreign businesses aiming to build a presence in the region. We will handle the setup, running, and any associated administration for your Turkey payroll, simplifying the whole process and empowering you to focus on the important job of a successful expansion, even if you don’t have an established entity in Turkey.
Why choose the Horizons payroll solution?
If you have an entity
If you have already set up a legal entity within Turkey, our payroll team can take all the complex payroll administration off your hands, helping you employ locally in accordance with local employment laws, managing HR, contracts, and handle any associated administration.
This option is perfect for larger businesses that could benefit from outsourced Turkey payroll and consultancy services.
If you don’t have an entity
If you don’t have a registered entity in Turkey, you can use our full payroll outsourcing service. Our Turkish subsidiary will act as employer of record for your employees, and our team will handle the HR, administration, and complex legal compliance work.
Choose this service for a low-risk, flexible, and scalable solution for your Turkish payroll setup and management, with all the benefits of hiring locally and none of the usual complications.
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Turkey payroll guide
Taxation and withholdings in Turkey
- Long-term insurance: 11% from employers and 9% from employees
- Short-term insurance: Between 1% and 6.5%
- Unemployment insurance: 2% from employers and 1% from employees
The income tax system in Turkey is progressive, with employees paying a higher percentage of salary in tax at higher income levels. The rates are between 15% and 40%.
Corporate tax in Turkey is 22% in 2020.
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Short Term Insurance Branch Premium
|
2%
|
|
Pension & Disability
|
11%
|
|
General Health Insurance
|
7.5%
|
|
Unemployment Insurance
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2%
|
|
Total Employment Cost
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22.5%
|
|
Pension & Disability
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9%
|
|
General Health Insurance
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5%
|
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Unemployment Insurance
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1%
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| Total Employee Cost | 15% |
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0-22,000
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15%
|
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22,001-49,000
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20%
|
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49,001-180,000
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27%
|
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180,001-600,000
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35%
|
|
600,001+
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40%
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Entitlements and terminations rules in Turkey
In general, employees in Turkey are entitled to notice of termination. The exact notice period depends on the employee’s length of time with the employer:
- Under six months of service = Two weeks of notice
- Between six and 18 months = Four weeks of notice
- Between 18 months and three years = Six weeks of notice
- Over three years = Eight weeks of notice.
Alternatively, employers can pay severance at an equivalent to the mandatory notice period.
Additionally, any employee who has been with an employer for at least a year is also entitled to a severance payment. This is equivalent to the last month’s pay times the number of years of service.
Probation periods in Turkey are usually limited to two months but can be extended to four months in some cases.
How to establish a Turkey payroll
tablishing a payroll in Turkey for local employment can be a complex process. Firstly, your organization will generally need an in-country entity to act as employer of record for any employees. You will then need to closely follow the relevant business and employment regulations and administrative procedures, which can be very time-consuming.
Alternatively, you can choose to outsource your Turkey payroll to Horizons. We provide the use of our Turkey subsidiary to act as employer of record for your Turkish workforce, so you won’t have to go through the complex process yourself and can benefit from our outsourcing services even without a registered entity in Turkey. Additionally, we can build your payroll and manage your HR, compliance, and any other associated administration, enabling you to work on successfully expanding your businesses in Turkey.
Manage payroll in Turkey
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
