Expand your organization into Turkey, with or without a Turkish entity
Turkey is perfectly positioned between the major continents of Europe and Asia, which determined its place as a hugely significant trading nation throughout history. Today, the country’s large population and diversified economy continue to make it a popular site for foreign investment.
If your organization is contemplating a move to Turkey, it is important to understand that progress can be slow in the country. The differences in language, culture, and business practices can all contribute to significant delays, so you should be prepared for your expansion to take weeks or even months to truly get underway.
At New Horizons, we offer full support to organizations planning an expansion into Turkey. Our bespoke professional employer organization (PEO), employer of record, and payroll services can offer everything needed to expand your business into Turkey, whether or not you have already established a Turkish entity.
With our own in-house recruitment team, we can also source, hire, and onboard your employees in Turkey, as well as manage any ongoing HR and compliance administration. Our dedicated team will provide everything you need to expand into Turkey as efficiently as possible and could save you thousands in expenditure.
Our Turkey PEO simplifies your expansion
New Horizons enables you to expand your operations into Turkey, even without a Turkish subsidiary.
Hiring in Turkey: Employment law overview
Employment contracts in Turkey
Written contracts of employment are legally required in Turkey, so you should always produce them for your employees when hiring. Your contracts should be written in Turkish, use the local currency of the Turkish lira, and clearly state all relevant details such as compensation, working hours, benefits, and so on.
Working hours in Turkey
The maximum length of a working week in Turkey is generally 45 hours. Beyond this, employers must pay overtime rates, which are 150% of normal pay. Alternatively, employees can be compensated with 1.5 hours of future leave for every hour of overtime.
Public holidays in Turkey
Turkey vacation leave
Employees in Turkey are entitled to paid vacation leave after working with an employer for one year. From one to five years of service, employees receive 14 days of vacation. For between five and fifteen, they receive 20 days. For over 15 years of service, they receive 26 days.
Turkey sick leave
Employers are not required to provide paid sick leave. However, employees are entitled to social security payments when absent from work through sickness, and many employers also contribute. The exact terms of your sick leave benefits should be clearly detailed in your employment contracts.
Parental leave in Turkey
Female employees in Turkey are entitled to 16 weeks of paid maternity leave, with eight weeks before and eight weeks after giving birth. During this leave, they are entitled to two-thirds of normal pay.
Male employees are not legally entitled to paid paternity leave, but many employers do offer an allowance of a few days. The exact terms should always be laid out in an employment contract.
Terminations and severance 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.
Taxation in Turkey
Employers and employees in Turkey are required to pay a percentage of salaries toward social security. The employee contribution should be withheld by the employer to pass onto the social security authorities. The contributions are:
- 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.
Health coverage in Turkey
Turkey has a combination of private and public healthcare, so many employers choose to offer private medical insurance as part of their benefits packages.
Turkey compensations & benefits
Compensation laws in Turkey
In 2020, the national minimum wage in Turkey is 2,943 lira per month for full-time employees.
Benefit management in Turkey
Many employees in Turkey choose to offer their employees benefits packages, including things such as extra pension contributions, a company car allowance, paid vacation days, a holiday bonus, and so on. However, setting up a benefits system in Turkey can be difficult if you are not familiar with the country’s complicated labor laws, language, and administrative norms.
Outsourcing your benefit management process to New Horizons ensures that you can adhere to ensure compliance and speed up the process significantly. Our Turkey employment experts will help you to find and arrange your benefits, advise on your strategy, and ensure compliance with the law, potentially saving you a significant amount of time and money.