Turkey sits at the crossroads of Europe and Asia, making it a strategic hub for global businesses seeking access to both regions. As one of the 20 largest economies worldwide, Turkey offers a dynamic market with strong industries in manufacturing, automotive, textiles, finance, IT, and logistics.

With a population of over 85 million, Turkey provides a large, youthful, and increasingly skilled workforce. Cities like Istanbul, Ankara, and Izmir are home to thriving hubs for technology, finance, and professional services. The country has made major investments in R&D, digital infrastructure, and startups, positioning itself as a rising technology hub in EMEA.

At the same time, Turkey’s employment environment can be complex. The Labor Law No. 4857 regulates contracts, working hours, benefits, and termination. Employers must also comply with social security contributions, severance pay rules, and payroll tax filings. Setting up a local entity involves multiple registrations, often taking several weeks or months.

Working with an Employer of Record (EOR) like Gloroots helps companies:

• Hire employees in days instead of months without opening a Turkish entity.
• Stay compliant with the Labor Law and social security obligations.
• Streamline payroll, tax filings, and statutory benefits.
• Focus on business growth while Gloroots manages HR, compliance, and contracts.

What are the key facts about Turkey’s economy and workforce?

Turkey is the 19th-largest economy globally, with a GDP exceeding USD 1 trillion. It is a major player in manufacturing, agriculture, energy, and trade, while also emerging as a technology and startup hub.

Economic Highlights

• Major Industries: Automotive (Ford Otosan, Tofaş), textiles & apparel, electronics, energy (Tüpraş, BOTAS), finance (İşbank, Garanti BBVA), and defense technologies.
• Exports: Automotive parts, textiles, machinery, chemicals, and agricultural goods.
• Technology & Startups: Istanbul is home to unicorns like Getir and Trendyol, attracting foreign VC investment.
• Strategic Location: A logistics hub bridging Europe, Asia, and the Middle East.
• R&D & Innovation: Strong government incentives for R&D centers and technology parks.

Turkey’s young, urban, and educated workforce makes it attractive for multinationals. Universities like Middle East Technical University, Boğaziçi University, and Istanbul Technical University produce highly skilled graduates in engineering, IT, and business.

What is the work culture and talent pool like in Turkey?

Turkey’s work culture blends traditional hierarchical structures with modern business practices. Respect for seniority is common, though younger professionals in tech and services favor collaborative and agile workplaces.

Employees are known for their adaptability, strong technical skills, and entrepreneurial mindset. However, work-life balance and flexibility are becoming increasingly important, especially among younger talent.

White-Collar Talent Strengths

• Engineering & Manufacturing: Strong presence in automotive, textiles, and construction.
• Technology & Startups: Growing pool of developers, data scientists, and digital professionals.
• Finance & Professional Services: Istanbul is a major financial hub.
• Multilingual Services: Many professionals speak English, German, or Arabic, supporting international business operations.

Key Hiring Hubs in Turkey

• Istanbul: Finance, technology, logistics, and services.
• Ankara: Government, defense, and R&D.
• Izmir: Trade, manufacturing, and logistics.
• Bursa & Kocaeli: Automotive and heavy industry.

Workforce Snapshot – Turkey

Q: What is the process of setting up an entity in Turkey?

Setting up a legal entity in Turkey requires navigating multiple government agencies and complying with the Turkish Commercial Code. The most common structure for foreign businesses is a Limited Liability Company (LLC – Limited Şirket).

Steps to Set Up an Entity in Turkey

1. Reserve Company Name – Submit to the Central Registry System (MERSIS).
2. Draft Articles of Association – Notarized and registered.
3. Deposit Minimum Capital – TRY 50,000 (~USD 1,700) minimum for an LLC.
4. Register with Trade Registry Office – Entity becomes legal upon registration.
5. Tax Registration – Obtain tax ID from the Turkish Revenue Administration.
6. Social Security Registration – Register with SGK (Social Security Institution).
7. Open Bank Account – For salaries and tax contributions.

Timelines

• Typically 4–8 weeks for full incorporation.

Ongoing Compliance Requirements

• Monthly payroll filings with SGK.
• Corporate tax filings (CIT 20–25%).
• Compliance with Labor Law No. 4857 and CBAs.

Entity Setup vs. Gloroots EOR in Turkey

Q: What are the key employment laws in Turkey that employers should know?

Employment in Turkey is regulated by the Labor Law No. 4857, which sets rules on contracts, working time, leave, and termination. Employers must also comply with mandatory social security contributions.

Key Employment Regulations in Turkey

• Employment Contracts
  • Must be in writing for contracts longer than 1 year.
  • Types: indefinite-term (default), fixed-term, part-time, remote.
  • Probation: up to 2 months (extendable to 4 with CBAs).
• Working Hours
  • Maximum 45 hours/week, typically spread over 6 days.
• Overtime Pay
  • 150% of hourly rate.
  • 200% on national holidays.
• Minimum Wage (2025)
  • TRY 20,002/month (~USD 670) gross.
• Annual Leave
  • 14 days for 1–5 years’ service.
  • 20 days for 5–15 years.
  • 26 days for 15+ years.
• Public Holidays
  • 15 national and religious holidays (paid).
• Sick Leave
  • Covered by SGK after 2 days, at 50%–67% of wages.
• Maternity Leave
  • 16 weeks (8 before and 8 after birth), fully paid by SGK.
• Paternity Leave
  • 5 days paid.
• Severance Pay
  • 30 days’ gross salary per year of service, capped annually (~TRY 23,000 per year in 2025).

Employment Law Snapshot – Turkey

Hiring Foreign Talent in Turkey: Work Visas and Immigration

Foreign nationals need a work permit to be employed in Turkey, except citizens of certain exempt countries. The system is managed by the Ministry of Labor and Social Security and the Directorate General of Migration Management.

Common Work Permits

1. Short-Term Work Permit
   • Valid up to 1 year, renewable.
   • Requires sponsorship by a Turkish employer.
2. Long-Term Work Permit
   • Available after 8 years of legal residence and work.
   • Grants permanent residence and work rights.
3. Independent Work Permit
   • For self-employed professionals and entrepreneurs.
4. Turquoise Card
   • Similar to an EU Blue Card.
   • Grants indefinite work and residence rights for highly skilled professionals.

Employer Responsibilities

• Apply for work permit online through the Ministry of Labor.
• Submit supporting documents: employment contract, trade registry certificate, tax registration, and financials.
• Register foreign employee with SGK (Social Security Institution) once permit is approved.

How Gloroots Simplifies Immigration in Turkey

Gloroots supports foreign talent mobility by:

• Acting as the legal employer of record to sponsor permits.
• Handling applications, renewals, and compliance filings.
• Registering employees with SGK and tax authorities.
• Ensuring contracts comply with Labor Law No. 4857.
• Providing relocation support and onboarding assistance.

Result: Companies access Turkey’s international talent pool without bureaucratic hurdles.

Q: What are the risks of misclassification in Turkey?

Like many countries, Turkey strictly distinguishes between employees and independent contractors. Misclassification is a common risk, especially in IT, consulting, and creative industries. Courts focus on the substance of the relationship, not just the contract label.

Criteria for Employee vs. Contractor Status

A worker is an employee if:

• The employer controls working hours, workplace, and tasks.
• The worker uses company-provided tools.
• They are integrated into the employer’s business structure.
• They receive a fixed salary.

A true contractor:

• Controls when, where, and how work is done.
• Works for multiple clients.
• Invoices for services via a tax ID.
• Bears business and financial risk.

Penalties for Misclassification in Turkey

• Reclassification: Contractors may be legally recognized as employees.
• Back Payments: Employer must pay retroactive SGK contributions, severance pay, and benefits.
• Fines: Administrative penalties from labor inspectors.
• Litigation Risk: Misclassified workers can file for wrongful dismissal, leading to court-ordered compensation.

Misclassification Risk Snapshot – Turkey

‍Use our Misclassification Risk Calculator to check your compliance exposure in Turkey.

How does an EOR help you run payroll in Turkey?

Payroll in Turkey is tightly regulated and monitored by the Social Security Institution (SGK) and the Turkish Revenue Administration (TRA). Employers must calculate wages, deduct taxes and contributions, remit payments on strict schedules, and keep detailed employment records. Mistakes in payroll can lead to significant penalties, audits, and liability for back-payments.

For foreign employers without a local entity, running payroll compliantly is nearly impossible. Partnering with Gloroots as your Employer of Record (EOR) enables you to pay your Turkish workforce accurately and on time, while staying fully compliant with national laws.

Key Payroll Compliance Requirements in Turkey

• Payroll frequency: Salaries are usually paid monthly, by the end of the month.
• Payslips: Employers must provide detailed payslips showing gross salary, deductions, and employer contributions.
• Income tax withholding: Employers must deduct income tax at progressive rates on behalf of employees.
• Social security contributions: Both employer and employee must contribute to SGK (covering health, pension, unemployment, and accident insurance).
• Severance accruals: Employers must accrue kıdem tazminatı (severance pay) equal to one month’s salary per year of service, payable upon termination (if criteria met).
• Holiday pay & overtime: Public holidays and overtime must be paid at premium rates.

How Gloroots Simplifies Payroll in Turkey

• End-to-end payroll management: We process salaries, bonuses, allowances, and overtime in compliance with Turkish law.
• Statutory deductions: We withhold income tax and employee SGK contributions, and remit both employer and employee portions to the authorities.
• Payslip management: Employees receive compliant, bilingual payslips (Turkish + English).
• Severance tracking: Gloroots accrues severance obligations correctly to avoid surprises at termination.
• Leave & benefits integration: Paid leave, public holidays, and statutory benefits are automatically factored into payroll.
• Compliance reporting: Monthly filings with SGK and TRA are completed on time to avoid penalties.

Payroll Compliance: Direct Employer vs. Gloroots (EOR)

How does tax compliance work in Turkey?

Tax compliance in Turkey covers personal income tax, social security contributions, and corporate tax obligations. Employers must withhold and remit employee income taxes and contributions, while ensuring compliance with reporting deadlines. For companies new to Turkey, missteps can cause financial penalties and reputational damage.

By partnering with Gloroots, you get access to expert tax management, ensuring your Turkish employees are paid correctly while all obligations to the government are met.

Personal Income Tax in Turkey (2025)

Turkey applies a progressive income tax system:

• Up to ₺110,000 → 15%
• ₺110,001 – ₺230,000 → 20%
• ₺230,001 – ₺870,000 → 27%
• ₺870,001 – ₺3,000,000 → 35%
• Above ₺3,000,000 → 40%

(Additional surtaxes may apply for certain industries and high-income earners.)

Social Security Contributions (SGK)

Both employer and employee must contribute to Turkey’s SGK system:

• Employer contributions: ~ 22.5% – 25% of gross salary
  (retirement, disability, health insurance, unemployment fund)
• Employee contributions: ~ 15% of gross salary
• Unemployment insurance: Employer 2%, Employee 1%
• Work accident insurance: Employer contribution (rate varies by industry risk)

Employer vs. Employee Contributions Snapshot

Tax Compliance: Direct Entity vs. EOR in Turkey

What benefits and entitlements do employees in Turkey receive?

Turkey provides employees with a mix of statutory entitlements under the Labour Law No. 4857 and contributions under the Social Security Institution (SGK). Employers are required to provide minimum benefits such as annual leave, overtime premiums, public holiday pay, and severance entitlements.

Beyond statutory benefits, competitive employers in Turkey also offer private health insurance, meal vouchers, transportation allowances, performance bonuses, and flexible work policies to attract and retain top white-collar talent.

Gloroots helps companies design and deliver benefits packages that meet statutory requirements while staying competitive in Turkey’s evolving job market.

Statutory Benefits in Turkey

• Annual Leave:
  • 14 days (after 1–5 years of service)
  • 20 days (after 5–15 years of service)
  • 26 days (after 15+ years of service)
• Public Holidays: 14 official paid public holidays (including Republic Day, Eid holidays, and National Sovereignty Day).
• Maternity Leave: 16 weeks (8 weeks pre-birth, 8 weeks post-birth) fully paid.
• Paternity Leave: 5 days.
• Sick Leave: Paid by SGK from the third day of illness (with medical certificate).
• Overtime Pay: 150% of regular hourly wage for overtime work.
• Severance Pay (Kıdem Tazminatı): One month’s gross salary per year of service if employment ends after at least 1 year (except in cases of resignation without cause).
• Notice Period (İhbar Tazminatı): Varies by tenure (2 weeks to 8 weeks).
• Social Security Benefits: Pension, health coverage, disability, unemployment insurance, and work accident insurance through SGK.

Common Additional Employer-Provided Benefits

• Private health insurance (to supplement SGK coverage)
• Meal allowances (cash or meal cards)
• Transport allowances
• Performance bonuses
• Training and development support
• Hybrid or flexible working arrangements

Employee Benefits: Direct Employer vs. Gloroots (EOR)

What’s involved in hiring and onboarding employees in Turkey?

Hiring in Turkey requires written employment contracts, prompt registration with SGK, and compliance with Labour Law No. 4857. Employers must also manage onboarding obligations, including workplace health and safety training, benefits enrollment, and payroll setup.

For foreign companies without a local entity, onboarding can be slow and risky. With Gloroots as your Employer of Record (EOR), you can hire in Turkey within days, without establishing a subsidiary. We manage contracts, registrations, payroll, and benefits—so your new hires can start work quickly and compliantly.

Key Steps in Hiring & Onboarding Employees in Turkey

1. Employment Contract
   • Must be in writing.
   • Should outline role, salary, working hours, leave entitlements, and termination conditions.
   • Fixed-term contracts allowed but cannot exceed 2 years without justified reason.
2. Probation Period
   • Up to 2 months (extendable to 4 months with collective agreement).
   • During probation, either party may terminate without notice or severance.
3. Social Security Registration (SGK)
   • Employee must be registered within one day before the employment start date.
   • Includes pension, health, unemployment, and work accident coverage.
4. Payroll Setup
   • Employees must be registered with the Revenue Administration for income tax withholding.
   • Employers must accrue severance and ensure overtime/public holiday pay compliance.
5. Onboarding Requirements
   • Orientation on workplace rules and compliance with Turkish labour law.
   • Occupational health & safety training depending on sector.
   • Provision of company equipment (laptops, mobiles, access cards).

Hiring & Onboarding: Direct Employer vs. Gloroots (EOR)

How do you successfully manage a workforce in Turkey?

Managing employees in Turkey requires balancing strict labor law compliance with an understanding of local workplace culture. The workforce is highly educated and entrepreneurial, with growing participation in technology, finance, and professional services. At the same time, Turkey has strong protections for employees under Labour Law No. 4857, making compliance in payroll, working hours, severance, and benefits critical.

Culturally, workplaces in Turkey often blend hierarchical decision-making with strong interpersonal relationships. Younger professionals increasingly value flexibility, professional growth, and work-life balance, while older generations may expect more formal structures. Employers who provide transparent communication, competitive benefits, and career development opportunities retain talent more effectively.

Gloroots helps global companies manage their Turkish workforce by combining HR compliance expertise with cultural alignment, ensuring smooth day-to-day operations.

Key Considerations for Workforce Management in Turkey

• Compliance with Labour Law: Employers must track working hours (max. 45 hours/week), overtime premiums, and leave entitlements.
• Payroll accuracy: Mistakes in income tax or SGK contributions can result in fines and employee disputes.
• Employee benefits: Beyond statutory benefits, offering private insurance, meal cards, and bonuses improves retention.
• Work culture: Personal relationships and respect for authority matter, but hybrid and flexible models are gaining popularity.
• Talent development: Investment in training, language courses, and upskilling (especially in IT and finance) strengthens loyalty.
• Unions & CBAs: Particularly active in manufacturing, transport, and public sectors; employers must respect collective agreements.

How Gloroots Supports Workforce Management

• Ensures legal compliance with payroll, benefits, and employment law.
• Provides local HR expertise to align policies with Turkish workplace norms.
• Delivers competitive benefits packages beyond statutory minimums.
• Supplies devices and equipment for hybrid/remote workers.
• Offers employee support with onboarding, HR queries, and compliance training.

What are the key steps and requirements in terminating employees in Turkey?

Termination of employees in Turkey is regulated strictly under Labour Law No. 4857, which protects workers from unfair dismissal. Employers must have valid grounds for termination, respect statutory notice periods, and pay severance where required. Mishandling terminations can lead to reinstatement orders, compensation claims, and fines.

With Gloroots as your EOR in Turkey, you can manage terminations compliantly, with all statutory obligations handled seamlessly.

Termination Process in Turkey

1. Grounds for Termination
   • Valid reasons: redundancy, restructuring, poor performance, or misconduct.
   • Prohibited dismissals: unlawful to terminate employees during maternity leave, military service, or union activity.
2. Notice Periods (based on tenure):
   • Less than 6 months → 2 weeks
   • 6–18 months → 4 weeks
   • 18–36 months → 6 weeks
   • Over 36 months → 8 weeks
3. Severance Pay (Kıdem Tazminatı)
   • Mandatory for employees with at least 1 year of service.
   • Equal to 1 month’s gross salary per year of service.
   • Capped at a government-determined ceiling, updated biannually.
4. Probation Period
   • During probation (max. 2–4 months), either party may terminate without notice or severance.
5. Final Payments
   • Must include unused annual leave, overtime, bonuses, and statutory entitlements.

Termination: Direct Employer vs. Gloroots (EOR)

What is the offboarding process in Turkey?

Offboarding in Turkey is a structured and compliance-driven process. Employers must respect notice and severance rules, settle all financial obligations, deregister employees from Social Security (SGK), and issue proper documentation. Mishandling offboarding can trigger fines, disputes, or even reinstatement orders.

With Gloroots as your Employer of Record (EOR), you can ensure that employee exits are handled smoothly, respectfully, and in full compliance with Turkish labor law.

Key Steps in the Offboarding Process

1. Formal Termination Notice
   • Provide written notice based on statutory notice periods or pay in lieu.
2. Final Payroll Settlement
   • Pay all wages up to the termination date.
   • Compensate for unused annual leave and overtime.
   • Pay severance (if applicable) and notice compensation.
3. Social Security Deregistration (SGK)
   • Notify SGK immediately to avoid ongoing contribution liabilities.
4. Tax Filings
   • Employer must remit final income tax withholdings.
   • Provide employees with an annual income statement.
5. Exit Documentation
   • Issue a certificate of employment (upon request).
   • Provide severance calculation breakdown if applicable.
6. Company Assets & Knowledge Transfer
   • Collect laptops, phones, and access cards.
   • Ensure secure data handover and process knowledge transfer.
7. Optional Exit Support
   • Some employers offer exit interviews or outplacement services to maintain employer brand.

How Gloroots Simplifies Offboarding in Turkey

• Ensures statutory notice and severance obligations are calculated correctly.
• Processes final payroll, leave payouts, and overtime in compliance.
• Deregisters employees promptly from SGK and tax authorities.
• Manages the return of company assets and ensures secure data handling.
• Provides employee-friendly offboarding with compliant documentation.

What costs and financial planning do you need with an Employer of Record in Turkey?

Hiring in Turkey involves more than just paying salaries. Employers must budget for statutory contributions to SGK, severance accruals, holiday pay, and supplemental benefits. The total cost of employment (TCE) is typically 25–35% higher than the base salary once social security, benefits, and statutory obligations are factored in.

Gloroots makes financial planning predictable by consolidating all costs—salary, taxes, contributions, and benefits—into a single monthly invoice. This ensures compliance and cost transparency.

Key Employment Cost Components in Turkey

• Base Salary
  • Example (2025 averages in Istanbul):
    • Software Engineer: ₺450,000 – ₺650,000 annually
    • Finance Analyst: ₺350,000 – ₺500,000 annually
    • Marketing Specialist: ₺300,000 – ₺450,000 annually
• Employer Social Contributions (SGK)
  • ~ 22.5% – 25% of gross salary (pension, health, unemployment, work accident).
• Employee Contributions
  • ~ 15% of gross salary (withheld at source).
• Severance Pay (Kıdem Tazminatı)
  • 1 month’s gross salary per year of service (capped).
• Annual Leave & Holidays
  • Paid leave entitlement and 14 national holidays.
• Supplemental Benefits (common in white-collar roles)
  • Private health insurance
  • Meal/transport allowances
  • Performance bonuses

How Gloroots Optimizes Cost Planning

• Provides transparent monthly invoicing covering all employment costs.
• Handles SGK registration, tax withholdings, and severance accruals.
• Designs competitive benefit packages without overinflating budgets.
• Allows you to scale teams in Turkey without hidden compliance costs.

Cost Comparison: Direct Employer vs. Gloroots (EOR)

What challenges might you face, and how do you solve them using an EOR in Turkey?

Turkey offers access to a dynamic, cost-competitive workforce and a strategic location between Europe and Asia. However, employers face legal, administrative, and cultural challenges that can complicate hiring and workforce management.

From navigating strict labor laws to budgeting for severance, employers often underestimate the complexity of compliance in Turkey. Using an Employer of Record (EOR) like Gloroots mitigates these risks, enabling you to expand into Turkey quickly and compliantly while focusing on business growth.

Key Challenges of Hiring in Turkey

1. Complex Labor Laws
   • Labour Law No. 4857 regulates contracts, working hours, overtime, termination, and severance.
   • Challenge: Foreign employers risk penalties if they misinterpret obligations.
2. High Social Contribution Burden
   • Employers must contribute ~22.5%–25% of salary to SGK.
   • Challenge: Miscalculations can result in fines and back-payments.
3. Severance & Notice Requirements
   • Mandatory kıdem tazminatı and ihbar tazminatı must be accrued correctly.
   • Challenge: Many employers fail to budget for these costs.
4. Entity Setup Delays
   • Incorporation, tax registration, and SGK setup can take months.
   • Challenge: Market entry is slowed, and hiring opportunities are missed.
5. Workplace Culture Differences
   • Hierarchical structures and personal relationships are important in Turkish workplaces.
   • Challenge: Foreign employers may misalign HR practices with employee expectations.

How Gloroots Solves These Challenges

• Full Compliance: Ensures employment contracts, working hours, and terminations meet Turkish labor law.
• Payroll & Benefits: Manages SGK contributions, severance accruals, and statutory benefits.
• Fast Hiring: Hire employees in days without needing a local entity.
• Cost Transparency: Provides predictable monthly invoicing with no hidden liabilities.
• Cultural Alignment: Offers local HR expertise to adapt benefits, policies, and management practices.

Challenge vs. Solution: Direct Entity vs. Gloroots (EOR)

Conclusion

Turkey presents a compelling opportunity for global companies—offering a young, skilled workforce, competitive labor costs, and access to two continents. But the country’s employment and tax regulations are strict, and compliance failures can be costly.

With Gloroots as your Employer of Record in Turkey, you can:

• Hire employees in days, not months, without opening a local entity.
• Stay compliant with Labour Law No. 4857 and SGK requirements.
• Offer statutory and supplemental benefits to attract and retain top talent.
• Simplify payroll, tax, and HR administration through one partner.
• Focus on growth while Gloroots manages compliance, onboarding, and workforce management.

Gloroots makes hiring in Turkey simple, compliant, and fast.