How to Use An Employer of Record in
Turkey

Hiring in Turkey requires compliance with Labour Law No. 4857, which mandates specific severance payment calculations, strict notice periods tied to tenure, and employer social security contributions currently at 20.5% of gross salary. An Employer of Record in Turkey becomes the legal employer of your staff, handling all statutory obligations, payroll processing, and employment contracts while you maintain full operational control and start hiring within days. The EOR removes the burden of navigating Turkey's complex severance regime, which calculates payments based on 30 days' wages for each year of service with annual caps set by the government, and ensures your contracts comply with collective bargaining agreements that often override statutory minimums in specific sectors.

What Is an Employer of Record in Turkey?

An Employer of Record in Turkey is a third-party organisation that becomes the legal employer of your staff under Turkish law, handling all statutory obligations, payroll, and compliance while you retain full operational control. The EOR issues employment contracts in its own name, registers employees with the Social Security Institution (SGK), withholds income tax for the Turkish Revenue Administration, and manages all filings and contributions required under Turkish employment legislation. This structure allows your company to hire employees in Turkey without establishing a subsidiary, branch office, or other legal entity.

Under Labour Law No. 4857, every employment relationship in Turkey requires a compliant written contract that includes mandatory clauses covering job description, salary, working hours, and notice periods. Employers must pay social security contributions of 20.5% on gross wages, comply with collective bargaining agreements (toplu iş sözleşmeleri) that apply to many sectors and set terms above statutory minimums, and provide severance payments calculated at 30 days' wages per year of service when terminating employees who meet the qualifying conditions. The EOR ensures these obligations are met in full and on time, adapting to sector-specific collective agreements and regional variations in minimum wage enforcement.

You retain complete control over the employee's daily work, performance management, role responsibilities, and strategic direction. The EOR owns the legal employment relationship, issues payslips, processes monthly payroll in Turkish Lira, files all statutory returns with SGK and the tax authority, maintains compliant contracts, administers statutory leave entitlements, and manages termination procedures including notice periods and severance calculations when you decide to end the employment.

How Does an Employer of Record Work in Turkey?

The EOR model in Turkey is a structured partnership where the EOR assumes legal employer responsibilities while you direct the employee's work. The process moves from defining employment terms through contract issuance, government registration, payroll setup, and ongoing compliance management. Here's how each stage works in practice under Turkish employment law.

Step 1: Define Role and Employment Terms

You provide the EOR with the job title, salary, working hours, start date, and any specific benefits you want to offer. The EOR reviews these terms against Turkey's 2026 minimum wage of 17,002 Turkish Lira per month and checks whether a collective bargaining agreement applies to the role based on sector and employee classification. If a collective agreement covers the position, the EOR ensures your proposed terms meet or exceed those minimums, which often include higher base pay, additional leave days, and supplementary benefits. The EOR also confirms whether the role qualifies as fixed-term or indefinite under Labour Law No. 4857, which restricts consecutive fixed-term contracts to prevent abuse.

Step 2: EOR Compliance Check

Before drafting the contract, the EOR verifies that your proposed salary meets the 2026 monthly minimum wage of 17,002 Turkish Lira and that working hours do not exceed the statutory maximum of 45 hours per week as set in Labour Law No. 4857, Article 63. The EOR confirms correct employee classification, distinguishing between standard employees, part-time workers, and roles that may trigger collective agreement coverage. If your company operates in manufacturing, construction, textiles, or another sector with active union agreements, the EOR identifies the applicable collective agreement and adjusts terms accordingly. The compliance check also covers probation period limits, which cannot exceed two months for standard roles or four months for roles requiring specific qualifications under Article 15 of Labour Law No. 4857.

Step 3: Employment Contract

The EOR prepares a written employment contract in Turkish, as required by Article 8 of Labour Law No. 4857, listing the EOR as the legal employer. The contract must include the job description, workplace location, gross salary and payment frequency, working hours and rest periods, notice period and termination conditions, and probation period if applicable. For fixed-term contracts, the EOR includes the objective justification and end date, ensuring the term does not exceed the limits set by the Constitutional Court's 2016 ruling that restricts successive fixed-term contracts to prevent circumvention of severance rights. The contract is governed by Labour Law No. 4857, and the employee signs electronically or on paper before the start date. The EOR retains the original and provides copies to both you and the employee.

Step 4: Government Registrations

The EOR registers the employee with the Social Security Institution (SGK) using the SGK e-Bildirge system, which must be completed at least one day before the employee's first day of work under Social Insurance and General Health Insurance Law No. 5510. This registration activates the employee's social security coverage, health insurance, and unemployment insurance contributions. The EOR also registers the employee with the Turkish Revenue Administration for income tax withholding purposes, using the employee's Turkish identification number or tax number. Late registration with SGK triggers administrative fines starting at 1,146 Turkish Lira per day of delay as of 2026, and the employee may be denied access to healthcare or other social security benefits until the registration is corrected. The EOR also notifies the Ministry of Labour and Social Security through the İŞKUR platform if required for reporting purposes.

Step 5: Payroll in Local Currency

The EOR processes payroll monthly, as monthly payment is the standard under Turkish practice and most employment contracts. Employees are paid in Turkish Lira by bank transfer to a Turkish bank account. The EOR calculates and withholds income tax using the progressive rates set by the Turkish Revenue Administration, which for 2026 range from 15% to 40% depending on income brackets, and applies the minimum living allowance (asgari geçim indirimi) based on the employee's marital status and number of dependents. The EOR remits withheld income tax to the Turkish Revenue Administration by the 26th day of the following month and submits the monthly payroll declaration (Muhtasar Beyannamesi) electronically. Social security contributions are calculated, withheld from the employee at 14%, and paid by the EOR to SGK along with the employer's 20.5% contribution by the last day of the month following the pay period.

Step 6: Ongoing Compliance

The EOR manages all recurring statutory obligations throughout the employment relationship. This includes filing monthly SGK contribution declarations and payments by the last day of each month, submitting monthly income tax withholding returns (Muhtasar Beyannamesi) by the 26th of the following month, and issuing annual income tax withholding certificates (Ücret Bordrosu and Muhtasar Özeti) to employees by the end of February each year. The EOR maintains accurate working time records, as required by the Ministry of Labour and Social Security, and ensures employees receive their statutory annual leave entitlement, which starts at 14 days per year and increases to 20 days after five years of service and 26 days after 15 years. The EOR monitors changes to Labour Law No. 4857, updates to minimum wage levels announced each December, and any amendments to collective bargaining agreements affecting your employees, implementing changes immediately to maintain compliance. The EOR also handles statutory reporting for workplace health and safety obligations, including registration with the occupational health and safety database if your employee count or sector triggers those requirements.

Step 7: Termination

When you decide to end the employment, the EOR manages the termination process under Labour Law No. 4857, which requires just cause for terminations of indefinite-term employees with more than six months of service in workplaces employing 30 or more staff. Notice periods are set by Article 17 of Labour Law No. 4857: two weeks for employees with less than six months of service, four weeks for service between six months and 18 months, six weeks for service between 18 months and three years, and eight weeks for service beyond three years. Collective agreements often set longer notice periods, and the EOR applies whichever is more favourable to the employee. Severance pay (kıdem tazminatı) is calculated at 30 days' gross salary for each year of service, subject to an annual cap of 32,731.43 Turkish Lira for 2026, and is payable when the employee has at least one year of service and the termination meets qualifying conditions under Article 120 of Labour Law No. 4857. The EOR calculates the severance amount, processes the final payroll including any unused annual leave, notifies SGK of the termination using the e-Bildirge system, issues the employment termination certificate (işten çıkış bildirimi), and remits all final payments within the statutory deadlines.

Employment Laws and Compliance an Employer of Record Handles in Turkey

When you hire through an Employer of Record in Turkey, they take on full compliance responsibility across all aspects of Turkish employment law, payroll tax, and social security administration, so you don't need to build an in-country HR function or navigate the complex regulatory framework yourself.

• Employment Contracts: Labour Law No. 4857 requires written employment contracts in Turkish that specify job description, salary, working hours, workplace, and notice periods. Failure to provide a compliant written contract exposes the employer to penalties under Article 100 of Labour Law No. 4857, starting at 4,582 Turkish Lira per violation in 2026, and the employee can claim ambiguity in their favour in any dispute. The EOR drafts, issues, and maintains all contracts in accordance with Labour Law No. 4857 and any applicable collective bargaining agreement.
• Payroll Tax and Income Tax Withholding: Employers must withhold income tax from employee salaries using the progressive rates set by Income Tax Law No. 193, which for 2026 range from 15% on income up to 110,000 Turkish Lira annually to 40% on income exceeding 880,000 Turkish Lira annually. The employer applies the minimum living allowance (asgari geçim indirimi) to reduce taxable income based on the employee's family status, remits withheld tax to the Turkish Revenue Administration by the 26th of the following month, and files the monthly Muhtasar Beyannamesi declaration electronically. Late or incorrect filings trigger tax penalties calculated at 1.5 times the policy interest rate per month, plus administrative fines. The EOR calculates withholding accurately, applies allowances, and ensures timely remittance and filing.
• Social Security and Pension Contributions: Social Insurance and General Health Insurance Law No. 5510 requires employer contributions of 20.5% and employee contributions of 14% on gross wages, with a monthly contribution ceiling of 110,925 Turkish Lira for 2026. These contributions fund pension insurance, general health insurance, unemployment insurance, and work accident/occupational disease insurance. Employers must register employees with SGK before the first day of work and remit contributions by the last day of the month following the pay period. Non-compliance results in fines, interest on late payments, and potential criminal liability for systematic evasion. The EOR registers employees with SGK, calculates and remits contributions on time, and maintains full contribution records.
• Statutory Leave Entitlements: Labour Law No. 4857, Article 53, grants employees paid annual leave starting at 14 working days per year for employees with less than five years of service, increasing to 20 days for five to 15 years and 26 days for more than 15 years. Employees must be allowed to take leave each year, and unused leave must be paid out on termination at the employee's current daily wage. Public holidays in Turkey, totalling 15.5 days in 2026, are additional paid days off. Employers who fail to grant statutory leave face administrative fines under Article 107 of Labour Law No. 4857, calculated at 457 Turkish Lira per affected employee per violation in 2026. The EOR tracks accrual, schedules leave in coordination with you, and ensures all entitlements are granted and recorded.
• Termination and Severance Pay: Labour Law No. 4857, Article 120, mandates severance pay (kıdem tazminatı) of 30 days' gross salary per year of service for employees with at least one year of tenure when termination meets qualifying conditions, including employer-initiated termination without just cause, employee resignation for just cause, or retirement. The daily wage calculation is capped at 1,091.05 Turkish Lira for 2026, resulting in a maximum annual severance amount of 32,731.43 Turkish Lira. Employers must also comply with notice periods under Article 17, and terminations of employees with more than six months of service in workplaces with 30 or more staff require valid and just cause. The EOR calculates severance, applies notice requirements, and ensures procedural compliance to avoid wrongful termination claims, which can result in reinstatement orders or compensation awards of four to eight months' salary under Article 21 of Labour Law No. 4857.
• Working Time Limits: Article 63 of Labour Law No. 4857 sets the standard working week at 45 hours, typically distributed as nine hours per day over five days or 7.5 hours over six days, though collective agreements often set shorter hours. Overtime work is permitted up to 270 hours per year, paid at 150% of the regular hourly rate. Employers must maintain accurate working time records for each employee and provide at least 24 consecutive hours of weekly rest, usually on Sunday. Violations of working time limits trigger fines of 457 Turkish Lira per affected employee per inspection under Article 104 of Labour Law No. 4857. The EOR tracks working hours, calculates overtime correctly, and ensures rest period compliance.
• Health and Safety Obligations: Occupational Health and Safety Law No. 6331 requires employers to conduct workplace risk assessments, appoint occupational health and safety professionals based on workplace hazard class, provide periodic health examinations, and register with the Ministry of Labour and Social Security's occupational safety database. All workplaces must comply regardless of size, and certain sectors face additional requirements. Non-compliance results in administrative fines starting at 9,164 Turkish Lira for failure to conduct risk assessments and up to 119,132 Turkish Lira for serious safety violations as of 2026. The EOR ensures basic health and safety compliance for office-based employees and coordinates with you to meet sector-specific requirements.
• Data Protection and Employee Privacy: The Law on Protection of Personal Data No. 6698 and the Turkish Personal Data Protection Authority (KVKK) regulations require employers to obtain employee consent for processing personal data, implement security measures to protect data, register as a data controller if processing above certain thresholds, and report data breaches within 72 hours. Employment data qualifies as personal data, and cross-border transfers to your company require either explicit consent or standard contractual clauses. Administrative fines for non-compliance range from 50,000 to 3,000,000 Turkish Lira depending on the violation severity. The EOR processes employee data in compliance with Law No. 6698, maintains data processing records, and implements safeguards for any data shared with you.
• Collective Bargaining Agreements: Labour Law No. 4857 and the Trade Unions and Collective Bargaining Agreement Law No. 6356 allow trade unions to negotiate collective agreements (toplu iş sözleşmeleri) that set terms and conditions above statutory minimums. These agreements cover entire sectors or specific workplaces, and employers must apply the agreement terms to all employees within scope, whether or not they are union members. Failure to comply with an applicable collective agreement exposes the employer to legal claims and union actions. The EOR identifies applicable collective agreements based on sector and employee classification, applies the superior terms in employment contracts, and monitors agreement renewals and amendments.
• Monthly Minimum Wage Adjustments: The Turkish government reviews and sets the minimum wage annually through the Minimum Wage Determination Commission, and the new rate takes effect each January. The 2026 minimum wage is 17,002 Turkish Lira per month for full-time employees. Employers must adjust all salaries that fall below the new minimum immediately, and failure to do so results in administrative fines and potential employee claims. The EOR monitors minimum wage announcements, adjusts payroll automatically for affected employees, and notifies you of any required salary increases to maintain compliance.

How Much Does It Cost to Use an Employer of Record in Turkey?

Using an Employer of Record in Turkey involves two cost components: the EOR service fee and the statutory employer costs mandated by Turkish law. Statutory costs are fixed by legislation and apply to every employer in Turkey, whether you hire through an EOR or your own entity. Playroll's EOR service fee starts from $399 per employee per month and is billed separately from the employee's salary and statutory contributions. The statutory costs include social security contributions, unemployment insurance, and other legally required payments calculated as a percentage of the employee's gross salary.

Let's look at an example that includes a base salary and the EOR service fee.

The Employer of Record service fee covers all employment administration: drafting and issuing compliant employment contracts, registering the employee with SGK and the Turkish Revenue Administration, processing monthly payroll in Turkish Lira with accurate tax and contribution calculations, filing all statutory returns and remitting contributions on time, managing statutory leave accrual and tracking, maintaining working time records, and handling termination procedures including severance calculations. The service fee is fixed and predictable, allowing you to budget accurately without worrying about variable compliance costs or the expense of maintaining an in-country HR and payroll team.

Employer of Record vs Setting Up an Entity in Turkey

The decision between using an Employer of Record or establishing your own legal entity in Turkey depends on your hiring scale, timeline, and long-term commitment to the market. Most foreign companies incorporate a limited liability company (limited şirket) in Turkey when establishing a subsidiary. Registering a limited şirket requires notarised articles of association, appointment of at least one resident director or a Turkish legal representative, registration with the Trade Registry Office, publication in the Turkish Trade Registry Gazette, and obtaining a tax registration certificate. The process realistically takes eight to 12 weeks and costs between $8,000 and $15,000 in legal fees, registration fees, and notary costs, excluding ongoing accounting and audit requirements.

For companies hiring fewer than 15 employees in Turkey, an Employer of Record is almost always the faster and more cost-effective route.

Playroll also supports your long-term growth through its Global Entity Setup product, which handles entity incorporation and local payroll in 120+ countries, so you can transition from EOR to your own compliant entity in Turkey when the time is right, without switching providers or rebuilding your HR processes.

How Long Does It Take to Hire Someone in Turkey Through an Employer of Record?

You can hire an employee in Turkey through an Employer of Record in 5 to 10 business days from the point you agree employment terms with your candidate to their official start date, assuming all documentation is provided promptly and no complex collective agreement issues arise.

• Stage 1: Contract preparation and signing (1 to 2 business days): The EOR drafts the employment contract in Turkish under Labour Law No. 4857, incorporating the agreed salary, working hours, job title, and any applicable collective agreement terms. The timeline depends on how quickly you and the employee review and approve the contract terms, and whether any negotiation over probation period, benefits, or working arrangements is required.
• Stage 2: Government registrations (1 to 2 business days): The EOR registers the employee with the Social Security Institution (SGK) using the e-Bildirge system and with the Turkish Revenue Administration for tax withholding purposes. Both registrations must be completed at least one day before the employee's first day of work under Social Insurance Law No. 5510, and missing this deadline triggers administrative fines starting at 1,146 Turkish Lira per day of delay and can deny the employee access to healthcare benefits until corrected.
• Stage 3: Payroll configuration and first cycle (1 to 3 business days): The EOR configures the employee in the payroll system, setting up bank transfer details, tax withholding rates based on the employee's personal situation and minimum living allowance eligibility, and social security contribution calculations. Turkey uses monthly payroll cycles, so the first payslip is issued at the end of the employee's first month, but onboarding setup happens before the start date to ensure the employee is paid correctly and on time.
• Stage 4: Turkey-specific requirements (1 to 2 business days): If the employee's role falls under a collective bargaining agreement, the EOR may need additional time to confirm the applicable agreement terms and ensure the contract reflects the superior collective agreement provisions. This identification process can run in parallel with contract drafting if the sector and role classification are clear from the outset, but ambiguous classifications or newly applicable agreements may add one to two business days to the timeline.

The timeline can extend if the employee lacks a Turkish identification number or tax number and needs to obtain one, which can add three to five business days depending on the regional tax office. Delays in providing required documentation such as passport copies, proof of address, or bank account details also push back the start date. If your proposed employment terms fall below an applicable collective agreement's minimums and require renegotiation, this can add two to three business days to the contract preparation stage.

This 5 to 10 business day timeline compares favourably to the eight to 12 weeks required to incorporate a limited şirket in Turkey, obtain all registrations and tax numbers, and set up compliant payroll systems before you can legally hire your first employee through your own entity.

How Playroll's Employer of Record Process Works in Turkey

Playroll's Employer of Record service in Turkey is designed around speed and full legal compliance, taking you from hiring decision to active payroll in under two weeks.

1. You define who you want to hire and the employment terms

You tell us the employee's role, salary, working hours, start date, and any benefits you want to include. We review these terms against the 2026 minimum wage of 17,002 Turkish Lira, check whether a collective bargaining agreement applies based on the sector and role, and confirm the employment structure complies with Labour Law No. 4857.

2. Playroll prepares a compliant contract under Turkish law

We draft a written employment contract in Turkish that lists Playroll as the legal employer, includes all mandatory clauses required by Labour Law No. 4857 such as job description, salary, working hours, notice periods, and probation terms, and incorporates any applicable collective agreement provisions. The employee reviews and signs the contract electronically, and we provide copies to you and the employee before the start date.

3. Employee onboarded and payroll goes live

We register the employee with the Social Security Institution (SGK) and the Turkish Revenue Administration within 5 to 10 business days of receiving all required documentation, ensuring the registration is complete at least one day before the employee's first day of work as required by law. Playroll configures payroll, calculates income tax withholding using the correct progressive rates and minimum living allowance, processes social security contributions at the statutory employer rate of 20.5% and employee rate of 14%, and issues the employee's first payslip at the end of their first month.

4. Playroll manages ongoing compliance

We handle all recurring employer obligations: monthly SGK contribution filings and payments, monthly income tax withholding returns to the Turkish Revenue Administration, statutory leave tracking and administration, working time record maintenance, and any updates required by changes to Labour Law No. 4857 or applicable collective agreements. If your hiring in Turkey grows to a scale where operating your own entity makes commercial sense, Playroll's global entity setup service can incorporate your limited şirket, transition employees, and manage local payroll, so you stay with one provider as your operations mature.