Payroll in Turkey: A 2025 Guide for Employers
Turkey's strategic location bridging Europe and Asia, coupled with a dynamic economy and young workforce, makes it an attractive destination for organizations seeking growth opportunities.
However, navigating the intricacies of local payroll and tax legislation can be challenging due to frequent regulatory changes and complex compliance requirements.
Here’s a comprehensive guide on payroll in Turkey, tailored to cover the full scope from taxes to payroll setup and options for employers.
Payroll Taxes and Contributions in Turkey
Navigating payroll taxes and contributions in Turkey involves understanding various statutory obligations that both employers and employees must fulfill.
This section provides a detailed overview of the key components, including their purposes, breakdowns, and any exceptions.
1. Social Security Premiums (SGK–Sosyal Güvenlik Kurumu)
Purpose: Covers healthcare, pensions, disability, maternity, and long-term insurance.
Contribution Breakdown:
| Component | Employer | Employee |
| Long-Term Insurance (retirement) | 11% | 9% |
| General Health Insurance | 7.5% | 5% |
| Short-Term Insurance (accidents, etc.) | 2% (avg) | — |
| Total | 20.5% | 14% |
Exceptions:
- Contribution rates may vary slightly depending on the risk class of the job.
Employers may receive a 5% discount on their share if they are compliant with SGK payments (Law No. 5510, Art. 81).
More info: SGK Official Site – Sosyal Güvenlik Kurumu
2. Unemployment Insurance (İşsizlik Sigortası)
Purpose: Provides financial assistance to eligible employees who become unemployed.
Contribution Breakdown:
| Party | Rate |
| Employer | 2% |
| Employee | 1% |
| Government | 1% |
- Deducted and remitted alongside social security premiums monthly.
- Managed by ISKUR (Turkish Employment Agency).
More info: İŞKUR – Unemployment Insurance Info
3. Income Tax (Gelir Vergisi)
Purpose: Withheld monthly by the employer, based on gross salary and cumulative earnings.
2025 Progressive Income Tax Brackets:
| Income Bracket (TRY) | Tax Rate |
| 0 – 110,000 | 15% |
| 110,001 – 230,000 | 20% |
| 230,001 – 870,000 | 27% |
| 870,001 – 3,000,000 | 35% |
| Over 3,000,000 | 40% |
- These brackets accumulate over the calendar year.
- Employers are responsible for withholding and remitting this tax.
More info: Turkish Revenue Administration – Income Tax Brackets
4. Stamp Tax (Damga Vergisi)
Purpose: Levied on the employment contract and salary payment documents.
- Rate (2025): 0.759% of gross salary
- Borne entirely by the employee
- Withheld monthly by the employer
This tax is fixed across all sectors and is applied regardless of the employee's income bracket.
More info: Stamp Tax Details – GIB
Summary Table
| Contribution Type | Employer % | Employee % | Notes |
| Social Security (SGK) | 20.5% | 14% | Includes health, pension, and disability benefits |
| Unemployment Insurance | 2% | 1% | Plus 1% from the state |
| Income Tax (withholding) | — | 15%–40% | Based on progressive brackets |
| Stamp Tax | — | 0.759% | Withheld monthly from gross salary |
Special Regimes & Incentives
- New Technology Startups (per Law No. 5746): May be exempt from employer SGK premiums for R&D and innovation staff.
- Young/New Employees (under 29): Some incentives may waive employer contributions for a limited time.
- Disabled Workers: Employers receive discounted premiums for hiring registered disabled individuals.
Employers are encouraged to check with their local tax office or legal counsel for applicable exemptions.
How Payroll Tax Is Calculated in Turkey
Calculating payroll tax in Turkey involves a series of steps to ensure compliance with statutory requirements. Understanding each component is essential for accurate payroll processing.
- Determine Gross Pay: Start with the employee's gross salary, which is the total compensation before any deductions.
- Calculate Social Security Contributions: Deduct 14% from the employee's salary for their social security contribution and 20.5% from the employer's side.
- Withhold Income Tax: Apply the progressive income tax rates based on the employee's income bracket to determine the amount to be withheld from their salary.
- Deduct Stamp Tax: Calculate 0.759% of the gross salary as the stamp tax, which is deducted from the employee's pay.
- Account for Unemployment Insurance: Deduct 1% from the employee's salary and 2% from the employer's side for unemployment insurance.
- Calculate Net Pay: Subtract all deductions from the gross salary to arrive at the employee's net pay.
Example Calculation
For a full-time professional with a gross monthly salary of TRY 10,000:
- Social Security Contribution: Employee: TRY 1,400 (14%), Employer: TRY 2,050 (20.5%)
- Income Tax: Assuming a 20% tax rate, TRY 2,000
- Stamp Tax: TRY 75.90 (0.759%)
- Unemployment Insurance: Employee: TRY 100 (1%), Employer: TRY 200 (2%)
Net Pay Calculation:
- Gross Salary: TRY 10,000
- Total Deductions: TRY 3,575.90 (Employee's share)
- Net Pay: TRY 6,424.10
Key Elements of Payroll in Turkey
Understanding the key elements of payroll in Turkey is crucial for employers to ensure compliance with local labor laws and to manage employee benefits effectively. This section outlines the essential components that influence payroll operations.
Fiscal Year
The fiscal year in Turkey runs from January 1 to December 31. Employers must align their payroll processes with this calendar to ensure timely tax reporting and compliance.
Payroll Cycle
Most employers in Turkey follow a monthly payroll cycle, with payments typically made at the end of each month. However, some sectors may have bi-weekly payroll or weekly cycles.
Minimum Wage
As of 2025, the gross minimum wage in Turkey is TRY 26,005.50 per month. Employers must adhere to this minimum to comply with labor regulations.
Overtime
Overtime is compensated at 1.5 times the regular hourly rate. Employers must track and compensate any extra hours worked beyond the standard 45-hour workweek.
Termination
Termination procedures require adherence to notice periods, which vary depending on the length of employment. Employers must provide written notice and comply with severance obligations.
Severance
Employees are entitled to severance pay if they have completed at least one year of service. The amount is typically one month's salary for each year of service.
Annual Leave
Employees are entitled to a minimum of 14 days of paid annual leave after one year of service, increasing with the length of employment.
Maternity Leave
Female employees are entitled to 16 weeks of paid maternity leave, divided equally before and after childbirth.
Paternity Leave
Fathers are entitled to five days of paid paternity leave following the birth of a child.
Adoption Leave
Adoptive parents are granted three days of paid leave upon the adoption of a child.
Sick Leave
Sick leave is provided based on medical certification, with pay rates varying depending on the duration and nature of the illness.
Holidays
Turkey recognizes several national holidays, during which employees are typically entitled to paid leave. Employers must account for these holidays in their payroll calculations.
How to Set Up Payroll in Turkey
Setting up payroll in Turkey requires adherence to local regulations and a systematic approach to ensure compliance with labor laws. The following steps outline the process for establishing payroll operations in Turkey.
Step-by-Step Guide to Setting Up Payroll
- Register with the Turkish Tax Authorities: Begin by registering your business with the Turkish Revenue Administration to obtain a tax identification number, which is essential for all payroll and tax-related activities.
- Enroll with the Social Security Institution (SSI): Register your company and employees with the SSI to ensure contributions for social security, health, and unemployment insurance are properly managed.
- Open a Local Bank Account: Establish a Turkish bank account for salary disbursements. This facilitates smooth transactions and compliance with local financial regulations.
- Understand Labor Laws and Employment Contracts: Familiarize yourself with Turkish labor laws and draft employment contracts that comply with legal requirements, including clauses on wages, working hours, and benefits.
- Choose a Payroll System: Decide whether to manage payroll in-house or outsource to a local payroll provider. Consider using payroll software that complies with Turkish regulations to automate calculations and reporting.
- Set Up Payroll Processes: Establish processes for calculating salaries, withholding taxes, and making social security contributions. Ensure these processes are aligned with the payroll cycle and fiscal year.
- Implement Record-Keeping Practices: Maintain accurate records of all payroll transactions, employee details, and compliance documentation to facilitate audits and reporting.
- Stay Updated on Regulatory Changes: Regularly review changes in tax rates, labor laws, and social security requirements to ensure ongoing compliance.
By following these steps, employers can effectively set up payroll operations in Turkey and ensure compliance with local regulations.
Payroll Options for Employers in Turkey
Employers in Turkey have several options for managing their payroll processes, each with its unique advantages and challenges. Understanding these options helps businesses choose the most suitable approach for their operations.
Internal Payroll Management
Managing payroll internally involves handling all payroll functions within the organization, typically using in-house staff and software.
Pros:
- Greater control over payroll processes and data.
- Immediate access to payroll information and reports.
Cons:
- Requires investment in payroll software and training.
- Risk of compliance errors due to complex local regulations.
Outsourcing to a Local Partner
Outsourcing payroll to a local partner involves hiring a specialized Turkish firm to handle payroll processing and compliance.
Pros:
- Expertise in local regulations ensures compliance.
- Reduces the administrative burden on internal staff.
Cons:
- Less control over payroll processes.
- Potential for communication challenges with external partners.
Global Payroll Provider
Using a global payroll provider centralizes payroll operations across multiple countries, including Turkey.
Pros:
- Streamlined payroll processes across different locations.
- Access to advanced technology and reporting features.
Cons:
- May lack specific expertise in Turkish regulations.
- Can be more expensive than local solutions.
Employer of Record (EOR)
An EOR takes on the responsibility of employing staff on behalf of the company, managing all HR and payroll functions.
Pros:
- Simplifies compliance with local labor laws.
- Reduces risk and liability for the business.
Cons:
- Less direct control over employment terms and conditions.
- Potentially higher costs compared to other options.
See our pick of the best EOR services in Turkey.
By evaluating these options, businesses can select the most appropriate payroll solution that aligns with their operational needs and compliance requirements in Turkey.
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