Hiring at a Glance

Turkey is a large transcontinental economy (straddling Europe and Asia) with a dynamic labor market. Employers must comply with strict labor protections under Labor Law No. 4857, which mandates a 45-hour workweek (8h/day, 6 days) and 150% overtime pay. All new hires must be registered with the Turkish tax office and Social Security Institution (SGK), and employment contracts must be written in Turkish per the Labor Law. Turkey’s workforce is sizable and growing – about 15% of the population is aged 15–24 – supporting strong talent pipelines in engineering and manufacturing. Major industries include automotive, textiles, and a burgeoning tech sector; however, compliance burdens (taxes, social insurance, severance) are relatively high compared to many peers.

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Key characteristics of talent market

• Youthful, engineering-oriented workforce: Turkey’s labor pool includes a large young cohort (~15% ages 15–24) and many engineering and IT graduates. This has fueled innovation across sectors “from manufacturing to services”.
  
• Regional bridge market: Turkey’s strategic location and EU-ties make it attractive to multinationals. Istanbul and Ankara offer large urban talent pools.
  
• Language and business culture: Turkish is the legal work language, and most official contracts must be in Turkish. English is used in multinational companies, but local knowledge of regulations is crucial.
  
• Regulated labor environment: Turkey has powerful labor protections, including mandatory severance pay (calculated on full salary including bonuses) and rules on overtime and leave. Compliance sensitivity is high (e.g. all wage components count toward SGK and severance).
  
  

Most In-Demand Skills in 2026

High-demand skills reflect Turkey’s tech and manufacturing focus. Top roles include software development (especially full-stack, mobile, cloud), QA/testing, data analysis and engineering, project management, finance and operations management, and bilingual customer support (especially EMEA markets). Employers increasingly seek digital and IT expertise (AI, cybersecurity, e-commerce) as well as supply chain and finance specialists to support export-oriented industries.

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Top Universities Supplying Talent

Leading Turkish universities produce many skilled graduates: Bogazici University (Istanbul), Middle East Technical University (METU, Ankara), Istanbul Technical University, Koç University, Bilkent University (Ankara), Sabanci University, and Istanbul University. These institutions have strong engineering, computer science, and business programs, feeding talent into local industries and multinationals.

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Salary Benchmarks for Roles

Salaries in Turkey can be high relative to local cost of living (but still lower in USD terms). As of 2026: a mid-level software engineer might earn roughly ₺900,000–1,800,000 per year, data engineers/architects around ₺1,100,000–2,200,000, and finance or IT managers about ₺1,000,000–2,000,000. (Exact pay varies by city and sector, and is subject to annual inflation adjustments.) Benefits often include social security, meal/transport allowances, and year-end bonuses, though these must all be reported as part of gross salary for tax purposes.

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Employer of Record vs Legal Entity Setup in Turkey

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To legally hire employees, a company must

• Register a legal entity: Incorporate under Turkish law (e.g. limited company, branch, or similar) and obtain a Turkish Tax Identification Number (Vergi Numarası).
  
• Register with authorities: Enroll the company with the tax office and Social Security Institution (SGK). Each employee must be registered with SGK on the first day of work.
  
• Prepare compliant contracts: Issue a written employment contract in Turkish, containing all required terms (salary, hours, probation, termination, etc.) and submit a copy to the Ministry of Labor if needed.
  
• Obtain permits: Foreign nationals need a valid Turkish work permit/visa. Ensure employees have national IDs (Turkish citizens) or passports (expats).
  
• Maintain records: Keep detailed payroll and HR records (attendance, wage payments, contract copies, tax forms, etc.) as required by law.
  

Employers must also comply with mandatory insurance schemes (e.g. occupational accident insurance) and sector-specific regulations. Failing to register a business or employees with SGK and tax authorities can result in heavy penalties.

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Cost of Entity Setup

Setting up a Turkish subsidiary or branch involves bureaucratic steps and costs. For example, incorporation typically requires drafting articles, depositing minimal share capital (at least TRY 10,000 for an LLC), opening a local bank account, and obtaining approvals. Healy Consultants estimate ~€5,900 (≈TRY 550,000) in first-year costs (including notary, registry, bank fees) and ~€2,950 thereafter. The process can take 6–12 weeks from start to finish, and requires navigating Turkish language documentation. This complexity often leads companies to prefer using an EOR to avoid entity setup entirely.

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What Hiring Through an EOR Means in Turkey

An Employer of Record (EOR) in Turkey becomes the legal employer registered with the Social Security Institution (SGK), Turkish tax office, and labour authorities, while the employee works exclusively for your company. You control daily work and performance, while the EOR carries all statutory employer responsibility under Turkish law.

Turkey’s employment system is governed by:

• Labour Law No. 4857
  
• Social Security Law
  
• Income Tax Law
  
• Trade Union Law
  
• Strong severance and notice protections
  

Foreign companies cannot legally employ staff in Turkey without:

• A Turkish employing entity
  
• SGK registration
  
• Tax office registration
  
• Payroll and labour reporting setup
  

An EOR provides this entire legal employer infrastructure without requiring you to establish a Turkish company.

An EOR in Turkey handles:

• Turkish-law compliant employment contracts
  
• Payroll processing in TRY
  
• Income tax withholding and filing
  
• SGK social security contributions
  
• Unemployment insurance
  
• Mandatory severance tracking
  
• Statutory leave and public holidays
  
• Termination and dispute handling
  
• Labour inspection support
  

This model is ideal for companies that want to hire in Turkey without managing SGK registration, payroll compliance, and severance exposure directly.

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Risk Involved in Both Models

Turkey’s labour system is severance-driven and employee-protective.

Key characteristics:

• Written contracts required
  
• Strong job-security provisions
  
• Mandatory severance pay
  
• High inspection activity
  
• Union and collective bargaining influence
  

Compliance failures can result in:

• Back payment of wages
  
• SGK penalties
  
• Tax penalties
  
• Court-ordered reinstatement or compensation
  

In Turkey, termination mistakes and SGK under-reporting are the biggest employer risks.

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EOR Vs. Entity: When to use What?

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Why is an EOR the Most Efficient Way to Hire in Turkey?

Turkey offers strong talent in engineering, manufacturing, design, sales, and operations but employment is governed by strict termination law and heavy social security requirements.

An EOR is not just payroll. It is the legal employer recognized by Turkish authorities, responsible for:

• Labour Law compliance
  
• SGK and tax filings
  
• Payroll execution
  
• Severance and termination handling
  

This allows foreign companies to operate in Turkey without inheriting SGK audits and termination-court exposure.

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#1. EOR Manages Severance Liability

Turkey requires severance pay when employment ends under many circumstances.

• Typically: 30 days’ salary per year of service
  
• Applies after 1 year of service
  
• Triggered by most employer-initiated terminations

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#2. EOR Controls SGK and Payroll Risk

Employment cost in Turkey includes:

• Social security
  
• Unemployment insurance
  
• Income tax
  
• Stamp tax

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#3. EOR Controls Termination & Reinstatement Risk

Turkish law allows employees to challenge dismissal. Courts may order:

• Reinstatement
  
• Back pay
  
• Additional compensation

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#4. EOR Avoids Entity & Administrative Burden

Entity setup requires:

• Company registration
  
• SGK and tax registration
  
• Accounting and payroll setup
  
• Inspections

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EOR vs. PEO in Turkey: How to Decide the Right Hiring Model?

A PEO in Turkey cannot legally employ workers. A Turkish employing entity is required.

• PEO: HR/payroll support only
  
• EOR: Legal employer

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Payroll, Taxes, and Monthly Compliance

Turkish payroll is processed monthly. Each pay cycle, employers calculate gross-to-net salaries, withholding all required taxes and contributions:

• Income tax (Gelir Vergisi): Progressive rates from 15% to 40% of salary. Employers withhold tax on each payroll and remit it by the 26th of the following month.
  
• Social security (SGK) contributions: Employers pay 20.75% of gross salary (general rate, reduced to 16.75% in certain sectors) and employees pay 14%. Contributions are capped at a monthly “insurable earnings” ceiling. Both employer and employee portions are due by the end of the following month.
  
• Unemployment insurance: Employers contribute an additional 2% of gross (employees 1%), also due monthly.
  
• Stamp tax: A 0.759% tax on gross wages is withheld and remitted by the employer (though it is a small amount per salary).
  

All monthly filings (tax withholding, SGK declarations, unemployment fund contributions) are submitted electronically through the unified e-Declaration system. For example, by the 23rd–26th of each month employers file and pay the previous month’s liabilities via the e-Filing portal. This includes the “SGK 10A” report for social security and the employer’s tax return. Late payment or miscalculation triggers penalties and interest.

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Salary Structure: Where Most Compliance Issues Begin

Many compliance issues in Turkey stem from how salary is structured. Turkish law requires that all recurring compensations count toward contributions and severance. In practice, this means that allowances (e.g. housing, car, meal vouchers, in-kind benefits) and bonuses (Eid/holiday bonuses) must generally be included in the employee’s gross salary for SGK and termination calculations. Employers sometimes try to label parts of pay as “non-taxable allowances” or reimbursements, but if these are effectively guaranteed payments, they should be treated as salary. Failing to include them (or under-reporting overtime pay) leads to violations. For example, all overtime and night-shift differentials must be calculated at 150–200% of base pay, and any error in these calculations incurs back-pay and penalties. In short, the “base salary” in Turkey often ends up larger than just the headline wage, and misclassification is a key audit risk.

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What Monthly Payroll Operations Actually Involve

Each month’s payroll run is a multi-step process:

• Gross-to-net calculation: Compute each employee’s gross salary and legally required benefits (e.g. overtime, bonuses, leave pay).
  
• Withhold taxes and contributions: Deduct employee income tax and employee-side SGK/UIF contributions; add employer SGK/UIF, unemployment and stamp tax liabilities.
  
• Remit payments: Deposit withheld taxes and social insurance contributions to Turkish authorities via bank transfer (no cash cash payments).
  
• File electronic returns: Submit the monthly SGK and tax declarations through the government portal (e-Declaration) by the due date.
  
• Issue payslips: Provide each employee a pay statement in Turkish detailing gross pay, deductions, and net pay.
  
• Recordkeeping: Keep copies of payroll registers, tax remittances, SGK reports, and signed contracts for at least five years (required for audit and legal compliance).
  
  

Step-by-Step Onboarding Process With an EOR in Turkey

Hiring in Turkey is a registry-driven, tax-heavy, and severance-sensitive process. Every hire must be traceable through SGK, tax authorities, and labour inspection systems. A Turkey-ready EOR runs onboarding as a legal workflow, not an HR formality.

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1. Confirm the EOR Is SGK and Tax Office Registered

Before proceeding, verify that the EOR:

• Has an active employer registration with the Social Security Institution (SGK)
  
• Is registered with the local Tax Office
• Is authorized to submit employment declarations and payroll filings
  

Why this matters:
If the employing entity is not properly registered, any payroll paid is treated as illegal employment and can trigger fines, back payments, and work bans.

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2. Define Contract Type and Job Security Status

Turkish law distinguishes between:

• Fixed-term contracts (limited use)
  
• Indefinite contracts (default)
  
• Job-security coverage (for employees in workplaces with 30+ employees and 6+ months’ service)
  

The EOR determines:

• Whether fixed-term is legally allowed
  
• Whether the role falls under job-security protection
  
• What termination procedures will later apply
  

Why this matters:
Using fixed-term contracts incorrectly forces conversion to indefinite and creates dismissal restrictions.

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3. Structure Salary, Bonuses, and Tax Exposure

The EOR validates:

• Gross salary in TRY
  
• Income tax bracket impact
  
• SGK contribution base
  
• Treatment of bonuses, allowances, and benefits
  
• Stamp tax exposure
  

Why this matters:
Incorrect salary structuring leads to underpaid SGK or tax, both heavily penalized during audits.

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4. Provide Full Cost-to-Company Breakdown

The EOR issues a quote including:

• Gross salary
  
• Employer SGK contribution
  
• Employer unemployment insurance
  
• Stamp tax
  
• Estimated severance accrual
  
• EOR management fee
  

Why this matters:
Severance in Turkey accrues silently and can become a major future liability if not planned.

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5. Draft Turkey-Compliant Employment Contract

The contract must comply with Labour Law No. 4857 and include:

• Job title and duties
  
• Salary and pay frequency
  
• Working hours and overtime
  
• Annual leave entitlement
  
• Termination and notice terms
  
• Severance reference
  

The EOR ensures:

• Contract enforceability in labour court
  
• Compliance with union/sector rules (if applicable)
  

Why this matters:
Turkish courts rely heavily on written contracts in reinstatement and compensation cases.

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6. Register the Employee with SGK Before Start Date

The EOR submits:

• Employment declaration to SGK
  
• Salary base and job information
  
• Start date and work location
  

Why this matters:
Late SGK registration even by one day is treated as illegal employment.

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7. Set Up Payroll and Monthly Reporting

The EOR configures:

• Payroll cycle
  
• Income tax withholding
  
• SGK and unemployment insurance
  
• Stamp tax
  
• Payslip issuance
  

Each month, the EOR files:

• Payroll tax declarations
  
• SGK contribution statements
  

Why this matters:
Turkey imposes penalties quickly for late or inaccurate filings.

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8. Configure Leave, Holidays, and Attendance

The EOR sets up:

• Annual leave tracking (increases with tenure)
  
• Sick leave procedures
  
• Maternity/paternity leave
  
• Public holiday pay rules
  
• Overtime tracking
  

Why this matters:
Improper leave or overtime tracking often triggers labour-court claims.

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9. Immigration Workflow (If Employee Is Not Turkish)

If the hire is a foreign national, the EOR manages:

• Work permit application
  
• Residence permit coordination
  
• Start-date alignment with permit approval
  
• Renewal tracking
  

Why this matters:
Working before permit approval is illegal, even if payroll is correct.

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10. First Payroll and Compliance Validation

The EOR:

• Processes first salary payment
  
• Issues compliant payslip
  
• Remits tax and SGK
  
• Confirms audit-ready documentation
  

Why this matters:
First payroll sets the baseline for future audits.

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11. Ongoing Compliance, Changes, and Termination

The EOR manages:

• Salary or role changes
  
• Contract amendments
  
• Inspections and audits
  
• Termination process, including:
  
  • Valid grounds
    
  • Notice or payment in lieu
    
  • Severance calculation
    
  • Reinstatement risk management
    

Why this matters:
In Turkey, termination mistakes are the fastest path to court and reinstatement orders.

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Build Your Turkey Team with Bolto EOR

Expanding into Turkey is not a hiring problem it is a SGK, tax, and severance-liability problem.

Bolto’s Employer of Record model is designed to absorb:

• Labour Law No. 4857 complexity
  
• SGK and tax exposure
  
• Payroll and audit risk
  
• Severance and termination liability
  

So you can scale in Turkey without becoming a legal employer.

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Full Legal Employer Coverage in Turkey

Bolto becomes the legal employer before:

• SGK
  
• Tax authorities
  
• Labour inspectorate
  
• Courts
  

Bolto handles:

• Contract drafting
  
• SGK and tax filings
  
• Payroll and payslips
  
• Leave and attendance
  
• Audit response
  
• Termination execution
  

You manage work and output, Bolto manages legal risk.

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Built for Fast Entry and Controlled Exit

With Bolto EOR, you can:

• Hire in weeks
  
• Avoid Turkish company formation
  
• Skip SGK and tax registration
  
• Exit without liquidation or employer-of-record transfer risk
  

This is ideal for:

• Market testing
  
• Remote teams
  
• Early-stage expansion
  
  

Transparent Cost Structure

Bolto provides:

• Salary and statutory cost breakdown
  
• Employer contributions
  
• Severance accrual visibility
  
• Fixed EOR fees
  
  

End-to-End Employee Lifecycle Management

Bolto manages the entire Turkish employment lifecycle:

• Contract creation
  
• SGK and payroll
  
• Leave and benefits
  
• Performance documentation
  
• Lawful termination
  
• Labour-court defense support
  

You are never required to interact directly with Turkish labour authorities.

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Designed for Risk-Controlled Growth in Turkey

Turkey penalizes:

• Late SGK registration
  
• Underpaid tax or SGK
  
• Invalid termination
  
• Missing documentation
  

Bolto’s EOR model is built for companies that want to:

• Hire quickly
  
• Stay audit-ready
  
• Avoid reinstatement risk
  
• Scale without entity liability