Employer of Record (EOR) in Turkey
Article Navigation
An Employer of Record (EOR) in Turkey streamlines and expedites business expansion into the country. Opting for a Turkey EOR ensures efficient and compliant management of payroll, contracts, work permits, taxation, and more, all without the need for establishing a legal entity. Mercans offers expert support to handle these crucial aspects for your workforce in Turkey.
The Employer of Record (EOR) in Turkey takes on the following key responsibilities:
- Ensuring that workers’ employment arrangements adhere to the laws and regulations of the country.
- Managing the local payroll process efficiently.
- Handling the necessary paperwork and filings related to employment taxes.
- Providing workers with detailed payslips for transparency.
- Ensuring the timely distribution of workers’ salary payments.
Enhance your global expansion with our Global PEO services in Turkey. Through our Employer of Record (EOR) in Turkey, we handle legal compliance, IP protection, and work visas, so you can focus on core operations and create a diverse, efficient global workforce without setting up a legal entity.
EOR Solutions in Turkey
EOR for Prospective Employees:
Mercans offers top-tier Employer of Record (EOR) services in Turkey, simplifying the entire employment process upon candidate selection. Our comprehensive solutions encompass payroll management, benefits administration, tax compliance, and HR administration, guaranteeing a seamless and legally compliant transition. With a profound understanding of Turkish labor regulations, we expertly handle employment contracts, salary disbursements, and benefits, ensuring full legal compliance and operational efficiency.EOR and Expert Recruitment Support in Turkey:
Mercans provides unparalleled Employer of Record (EOR) services in Turkey, streamlining the recruitment and integration of top talent. Our experienced team oversees the entire process, from candidate selection to seamless assimilation. We take care of employment contracts, payroll management, benefits administration, tax compliance, and HR administration, guaranteeing a frictionless transition for your workforce.Facilitating Expat Visa Sponsorship and Global Mobility:
Mercans offers comprehensive Employer of Record (EOR) services, simplifying the visa sponsorship process for expatriates and facilitating global mobility. We navigate the complexities of visa procedures and ensure full compliance with local regulations. Our specialized services bridge the gap between international talent and opportunities, ensuring a smooth transition for expatriate employees.Agent of Record (AOR) Services in Turkey:
An “Agent of Record” plays a pivotal role in ensuring compliance, documentation, and legal requirements in contractor payments. Mercans’ EOR services in Turkey excel in this capacity, serving as the premier choice for seamless, compliant, and efficient contractor payment solutions in the region.Converting Independent Contractors to Permanent Employees in Turkey:
Mercans’ EOR services in Turkey serve as a catalyst for the seamless conversion of independent contractors into permanent employees, expertly navigating the complex regulatory landscape. Leveraging our blend of experience and technology-driven efficiency, we ensure a smooth transition, placing a strong emphasis on compliance and precision throughout the process.HCM Integration in Turkey:
Integrate Mercans’ EOR services seamlessly with your Human Capital Management (HCM) system in Turkey to facilitate real-time data exchange, enhance compliance, and optimize cost-efficiency. Trust our expertise to provide a unified, compliant, and efficient approach, elevating your workforce management and payroll operations to a higher level of effectiveness.
Employment in Turkey
Turkey’s employment landscape is undergoing transformation, influenced by evolving initiatives and regulations. As Turkey continues to advance economically, it is essential to have a comprehensive understanding of employment regulations and compliance. Explore Mercans’ Employer Of Record services for comprehensive support in navigating the dynamic employment landscape in Turkey.
Employees vs Independent Contractors Compliance in Turkey
In Turkey’s EOR landscape, it’s essential to accurately distinguish between employees and independent contractors, as this distinction carries significant implications. Employees under EOR benefit from labor protections, with their taxes and insurance expertly managed, while independent contractors operate independently without employment benefits. Precisely delineating these distinctions, in accordance with Turkish labor law, is crucial to mitigate legal risks. Rely on Mercans’ EOR services in Turkey for precise workforce classification and comprehensive support.
Hiring and Recruiting in Turkey
Mercans revolutionizes the recruitment landscape in Turkey with an innovative hiring solution, streamlining the entire process in the region. This tool simplifies talent sourcing, assessment, and onboarding, ensuring a compliant and efficient recruitment experience in Turkey’s dynamic job market, especially in high-demand sectors like business development, sales, IT, finance, and marketing.
Employee Onboarding in Turkey
Mercans’ EOR Platform streamlines the onboarding process for foreign employers, simplifying the integration of remote talent. Through our Employee Self-Serve Portal, new hires can complete paperwork digitally, expediting the onboarding process. This user-centric interface enables easy document uploads and efficient navigation.
Background Verification in Turkey
Comprehensive background checks are a critical component of the hiring process, ensuring candidate credibility and suitability. Mercans recognizes the importance of this step and offers an efficient solution for background verifications in Turkey through our Employer of Record (EOR) services. Collaborating with Mercans provides a strategic advantage in managing background checks effectively, thanks to our expertise in EOR services. We ensure compliance with Turkish regulations and employment laws, offering meticulous verifications that include validating government-issued documents and conducting criminal record checks. Our efficient, technology-driven approach minimizes the risk of fraudulent information and adds transparency to the process. Beyond verification, we provide comprehensive support throughout the hiring journey, from talent identification to onboarding and legal compliance. As a trustworthy partner, Mercans guarantees accuracy, compliance, and a secure hiring process, enabling businesses to confidently navigate background checks and ensure the right fit for their organizations.
Top Skills on demand in Turkey
In the dynamic Turkish job market, staying attuned to the skills that are currently in high demand is crucial for effective recruitment. According to insights from reputable sources like CIO and International Wealth, here are the top skills that are currently sought after in Turkey:
- IT and Technology Specialists: As outlined in CIO, IT professionals are in high demand in Turkey, with various specialized roles garnering attention. From software developers to network administrators, the IT sector offers promising career opportunities.
- Engineering Professionals: Turkey’s growing infrastructure and development projects require skilled engineers. This includes civil engineers, mechanical engineers, and electrical engineers.
- Finance and Investment Experts: The financial sector in Turkey seeks professionals with expertise in finance, investment, and wealth management. Positions like financial analysts and investment consultants are particularly sought after.
- Healthcare Practitioners: The healthcare industry continues to grow in Turkey, leading to increased demand for healthcare practitioners, including doctors, nurses, and specialists in various medical fields.
- Digital Marketing Specialists: With the expanding digital landscape, companies are looking for digital marketing professionals to enhance their online presence and drive business growth.
Top #5 Cities in Turkey with Remote Talent
Cities like Istanbul, Ankara, and Izmir boast thriving pools of remote talent, particularly in roles such as Digital Marketing Specialists, E-commerce Managers, Data Analysts, and Sales Executives, driving business growth through online strategies. The tech sector seeks IT Professionals skilled in cybersecurity and cloud computing for efficient operations. Mercans, through its Employer of Record (EOR) services, sources global talent for these positions, supporting businesses in these cities.
Turkey Employment Contracts
Navigating the intricacies of employment contracts in Turkey is essential for both employers and employees. These contracts, as detailed in Turkish labor law resources, hold significant importance in shaping the terms and conditions of employment relationships:
- Fixed-Term Contracts: These are contracts with predetermined ends, as the name implies. It’s crucial to grasp the specific rules governing fixed-term contracts in Turkey, such as their maximum duration, renewal limitations, and situations in which they are applicable.
- Part-Time Contracts: Part-time work arrangements are commonplace in Turkey, offering flexibility to employers and employees alike. Familiarity with the legal requisites of part-time contracts, encompassing working hours, compensation, and benefits, is of paramount importance.
- Agency Workers: Agency workers represent a unique category of employment, often engaged through third-party staffing agencies. Understanding the legal framework regarding agency workers in Turkey, as outlined in Practical Law, is indispensable for complying with labor statutes.
- Penal Clauses: Employment agreements in Turkey may incorporate penal clauses that specify repercussions for breaches of contract terms. These clauses, discussed in Turkish Labor Law resources, serve as mechanisms for enforcing compliance and safeguarding the interests of both contractual parties.
Payroll in Turkey
Payroll in Turkey operates under stringent regulations. Employers must follow specific payroll cycles, calculating gross salaries, making deductions, and disbursing net income on fixed paydays. Minimum wage rates, set annually, determine the baseline income for employees. Taxes like Personal Income/Payroll Tax and Social Security Contributions are deducted from salaries. These contributions fund essential social security programs. Yearly payroll parameters, including tax rates and exemption amounts, influence salary calculations. The Social Security Base and Ceiling Amounts determine contribution limits, ensuring compliance with Turkish labor laws and tax regulations.
Payroll Cycle
In Turkey, the payroll cycle follows a systematic process similar to that of other countries. It involves the calculation and disbursement of employee salaries and related deductions on specific payment dates, typically monthly. The payroll cycle encompasses various key components, including:
- Salary Calculation: Employers compute the gross salary of employees, which includes their base salary, bonuses, and other forms of compensation.
- Deductions: Deductions are made from the gross salary to cover various taxes, social security contributions, and other mandated withholdings.
- Payment Processing: After calculating salaries and deductions, employers process payments to employees via bank transfers or physical checks on predetermined paydays.
- Reporting: Employers are required to submit payroll-related reports and declarations to government authorities to ensure compliance with tax and social security regulations.
Minimum Wages
Turkey sets minimum wage levels annually, typically in January. These minimum wage rates serve as the baseline for salary calculations, ensuring that all employees receive a minimum income. The minimum wage amount is subject to change each year and is a critical factor in determining the lowest legal wage an employer can pay to its workers.
Payroll Parameters
The Turkish payroll system incorporates various parameters and taxes, which include:
Personal Income/Payroll Tax: This tax is levied on employment income earned in Turkey. It is deducted directly from employees’ salaries and is a crucial component of the country’s revenue collection.
Social Security Contributions: Both employees and employers are required to contribute to the Turkish Social Security system. These contributions fund social security programs, including health insurance, retirement benefits, and disability coverage. The key components of social security contributions include:
- SSI Premiums (both Employee and Employer)
- SSI Unemployment Premiums (both Employee and Employer)
- Income Tax
- Stamp Tax
The Turkish government publishes payroll parameters annually in January, which serve as the basis for payroll calculations throughout the year. These parameters include:
- Income Tax Rate and Limits
- Social Security Minimum and Ceiling Amount
- All Exemption Amounts
- Severance Limits (Note: Changes in Severance Limit and Child Allowance Tax Exemption amounts may occur on July 1st of every year)
- AGI Amount (Adjustable Gross Income)
- Social Security Base & Ceiling Amounts and Rates:
- In Turkey, all payments are calculated based on their gross amounts, and social security contributions are applicable to both employees and employers. The rates for social security contributions are applied to the total gross of salaries, wages, and bonuses, up to a maximum monthly amount determined by the government for each year.
For example, in 2020, the ceiling amount was 22,072.50 Turkish Liras (TRY), and the base amount was 2,943.00 TRY. These rates play a significant role in determining the contributions made to the Social Security Insurance (SSI) system.It’s worth noting that employers can enjoy a 5% tax advantage discount if they pay all taxes on time, which impacts the percentage of employer SSI premiums. In this case, the employer’s SSI premium percentage would be 15.5%.
These Social Security amounts and rates are crucial for accurate payroll calculations and are reported monthly via e-declaration to government authorities. They play a pivotal role in ensuring compliance with Turkish labor and tax regulations.
Social Security in Turkey
Social security in Turkey is a crucial component of the country’s labor and social welfare system. It encompasses various aspects, including premium deductions, contributions, and unemployment insurance. Here’s an overview of how social security functions in Turkey:
Premium Deductions
Social Security Institution (SSI) Premium Deductions play a fundamental role in the Turkish social security system. These deductions are a combination of both employee and employer contributions and are calculated based on the employee’s gross salary.Employee Contribution
Employees in Turkey are required to contribute 14% of their gross salary to the social security system. This deduction helps fund various social security benefits, including healthcare and retirement benefits.Employer Contribution
Employers in Turkey also make contributions to the social security system on behalf of their employees. The employer’s contribution amounts to 20.5% of the employee’s gross salary. These contributions are essential for sustaining the country’s social security programs.Total Social Security Premium
When you combine the employee and employer contributions, the total social security premium amounts to 34.5% of the employee’s gross salary. This substantial contribution ensures that Turkish workers have access to essential social security benefits.Unemployment Insurance
In addition to social security premium deductions, Turkey has an unemployment insurance system in place to provide financial support to workers in case of job loss.Employee Contribution
Employees contribute 1% of their gross salary towards unemployment insurance. This contribution acts as a safety net for individuals who find themselves unemployed.Employer Contribution
Employers also play a role in supporting unemployment insurance. They contribute 2% of the employee’s gross salary, which helps sustain the unemployment insurance fund.Total Unemployment Premium
The total unemployment premium, which combines both employee and employer contributions, amounts to 3% of the employee’s gross salary. This fund serves as a vital resource for assisting individuals during periods of joblessness.| Component | Employee | Employer | |
|---|---|---|---|
| Long Term | Old Age, Disability and Death | 9 | 11 |
| Short Term | Occupational Accident (work injury), Occupational Disease, Old Age and Death | 0 | 2 |
| Short Term | General Health Insurance | 5 | 7.5 |
| Long Term | Unemployment Insurance Premium | 1 | 2 |
Gross salary is considered based on the monthly minimum and maximum legal basic wages in Turkey. Effective from 1 January 2023, the government of Turkey has increased the Social Security Minimum Wage Amount to 10,008.00 TRY Gross and 8,506.80 TRY Net. The monthly SSI Ceiling Amount has increased to a gross amount of 75,060.00 TRY.
SSI Exemption
In Turkey, the Social Security Institution (SSI) offers exemptions for specific categories of employees, providing relief from certain social security premium deductions. These exemptions aim to support vulnerable groups and stimulate employment. Here’s an overview of the SSI exemption system in Turkey:
New Graduates
New graduates entering the workforce for the first time benefit from an exemption. They are exempt from paying their share of the social security premium for the first year of employment. During this period, only the employer contributes to the social security premium.Female Employees
Female employees working in specific industries or regions may be eligible for social security premium exemptions. For instance, in certain industries like textiles, apparel, and leather, female employees under the age of 40 are exempt from their share of the social security premium. Additionally, female employees working in less developed regions may also qualify for exemptions.Disabled Employees
Disabled employees enjoy an exemption from their share of the social security premium. This exemption applies regardless of the sector or region in which they work. It aims to promote the employment of individuals with disabilities and provide them with greater financial support.Unemployed Graduates
Unemployed graduates who participate in vocational training programs approved by the Turkish Employment Agency (İŞKUR) may also receive an exemption. This program is designed to enhance the employability of recent graduates by providing them with essential skills.Social Security Support for the Unemployed
Individuals who have exhausted their unemployment benefits and remain unemployed may receive social security premium support from the Turkish government. This support covers their share of the social security premium for a specified period, offering a safety net during challenging times.Other Categories
Additional categories of employees, such as agricultural workers and seasonal employees, may be eligible for social security premium exemptions based on specific criteria outlined by the Turkish government.It’s essential to note that the exact eligibility criteria and the duration of exemptions may vary, and updates to these regulations can occur over time. Therefore, employers and employees should stay informed about the latest SSI exemption rules to ensure compliance with Turkish labor laws and to take advantage of available benefits.
These exemptions aim to promote social inclusion, encourage employment, and provide targeted support to vulnerable groups within the Turkish workforce. Understanding and leveraging these exemptions can benefit both employees and employers while fostering a more inclusive labor market.
Employer Costs in Turkey
Employing individuals in Turkey involves several employer costs, including social security contributions, income tax withholding, and other mandatory benefits. Let’s break down the employer costs for an employee with a Gross Annual Salary of TRY 40,000:
Social Security Contributions: Employers in Turkey are required to contribute to social security programs. The total annual employer cost for social security contributions would amount to TRY 28,170.48.
Total Annual Cost: When considering additional expenses such as private pension contributions and any other potential benefits or allowances, the total annual cost of employing an individual with a Gross Annual Salary of TRY 40,000 could be estimated at TRY 68,170.48.
For more detailed calculations and information about employer costs, you can refer to the Private Pension System in Turkey.
Personal Income Tax in Turkey
In Turkey, individuals are subject to Personal Income Tax (PIT) based on their annual income. The PIT rates vary depending on the income bracket. Employers are responsible for withholding and remitting the appropriate amount of income tax from employees’ salaries to the tax authorities. For comprehensive details on the Turkish PIT system, you can explore PwC’s Turkey Tax Summaries.
Employment Laws in Turkey
- Probation Period: Turkish labor laws allow employers to establish a probation period for newly hired employees. During this period, either party can terminate the employment contract with relatively short notice. The length of the probation period may vary depending on the employment agreement and sector.
- Termination Policy: Terminating an employment contract in Turkey must comply with labor laws and regulations. The process typically involves providing written notice, observing notice periods, and fulfilling any legal requirements related to severance pay.
Employee Benefits in Turkey
Employment in Turkey often includes a range of benefits, including health insurance, annual leave, public holidays, and additional allowances. These benefits can vary depending on the industry, employer policies, and employment agreements. To understand the specific benefits offered in Turkey, you can refer to this informative resource on Turkey Employee Benefits and Compensation.
Leave Policy in Turkey
Turkey’s labor laws stipulate various types of leave for employees, including annual leave, public holidays, maternity leave, and sick leave. Employers are required to comply with these regulations and provide employees with the appropriate leave entitlements. For a comprehensive overview of leave policies in Turkey, you can refer to the relevant section in the Labor Law document.
Work Permit in Turkey
Employing foreign nationals in Turkey involves obtaining work permits and complying with immigration regulations. Employers should be aware of the costs, application processes, and legal requirements related to work permits. For detailed information, you can explore the Employment for Foreigners section.
Conclusion
Navigating employment in Turkey requires a comprehensive understanding of employer costs, labor laws, employee benefits, leave policies, and work permits. Complying with these regulations is essential to establish a productive and legally compliant work environment. By prioritizing compliance and understanding the nuances of Turkish employment laws, employers can create a favorable and efficient workplace for their employees.