Payroll and HR in Turkey

Payroll and HR in Turkey

Local Information

Local Time (LIVE):3:57 PM
Local Currency:$1 = TRY8.17
Business Language(s):Turkish
Tax Year Dates:1st January – 31st December

 

Turkey has a rich history of trade, once being the epicentre of the Ottoman Empire. Founded in 1299, the empire was not fully dissolved until 1923, when Turkey was declared an independent Republic. Throughout this period, Turkey enjoyed a wealthy economy in which luxury goods including silk, tobacco, and spices were exported – many of which commodities continue to be exported today. Other top exports are vehicles, gold, and jewellery.

The Ottoman Empire was allowed to flourish in part due to Turkey’s strategic position between Europe and the East. This position remains to be a unique advantage for those doing business today. There are 57 airports in Turkey, 33 of which offer international flights. National airline Turkish Airlines alone offer flights to 246 international destinations in 124 different countries in the Americas, Europe, Africa, the Middle East and Asia. Within Turkey, public transport comes in the forms of taxis, buses, trams, ferries and the metro, which is simple to use and reliable.

Anyone thinking about a business expansion plan into Turkey should not only be familiar with cultural norms, language, and local transportation, but also the legislation involved with doing business in this country. Turkey has its own unique employment laws that can prove difficult to navigate, however with guidance from the experts at FMP, you can ensure that your company achieves compliance.

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Details correct at time of publication. You should not rely on these details without first seeking professional international advice.

Employer Must-Dos

In Turkey, employers must submit:

  • Corporate Income Tax return, due on the 25th day of the fourth month after the financial year end. (Ordinarily 25th April unless an alternative financial year has been arranged.
  • Taxable income should be declared and paid on a quarterly basis

Payroll in Turkey

What tax considerations are there?

Personal Income Tax

In Turkey, all Turkish residents are taxed on their worldwide income, whereas non-residents are taxed only on income derived from within Turkey. Personal income tax is levied at a progressive rate, starting at 0% for those earning less than 22,000 TRY ($3,169) annually, and up to 35% for those earning 600,000 TRY ($86,427).

Employees earning between 98.10 TRY and 735.75 TRY ($14.13 – $105.98) per day, are subjected to social security contributions. These must be payed by both the employee and employer. For Turkish nationals the charge is currently 20.5% from the employer, and 14% from the employee.

Corporate Income Tax (CIT)

On net profits, businesses in Turkey are liable to pay corporate income tax at a rate of 22%. Resident entities are subjected to tax on worldwide income, and non-resident entities operating in Turkey must pay online on Turkish-derived income.

The general rate for Value-added Tax (VAT) in Turkey is 18%.

HR in Turkey

What are the regular working hours in Denmark?

Employment law in Turkey dictates that working hours in one week cannot exceed 45 hours, and that these should be spread out over the number of days to be worked.

Offices and banks are generally open between the hours of 8.30am and 5.30pm, with a one hour closure for lunch between 12.30 and 1.30pm. Shops are open between 9am and 7pm, seven days a week, however during the summer, some shops will change their opening times to around 7am until 2pm, owing to the heat.

Vacation, maternity and sickness

After one year of service, employees in Turkey are entitled to annual leave depending on their length of service. Those who have worked for between one and five years are entitled to 14 days, those who have worked between five and 15 years are entitled to 20 days, and those who have worked for more than 15 years can have 26 days leave. In addition to these, there are 14.5 public holidays on which employees are not expected to work.

Pregnant women in Turkey are entitled to 16 weeks of maternity leave, eight weeks of which should be taken on either side of the birth. She can request to start her 16 weeks, three weeks before the baby is due, however. If a woman is pregnant with twins or more, this increases to 18 weeks. After the statutory maternity leave, mothers may apply for six months of additional leave however this is unpaid.

Employees in Turkey are entitled to one week of paid sick leave, upon receipt of a medical certificate. Anything over one week is unpaid, and those who are off sick for six weeks or more can have their employment contracts terminated without notice.

An additional type of leave that employees are entitled to in Turkey is Marriage leave. This is three days of paid leave for when an employee gets married. Three days of paid leave are also given in the event that an immediate family member dies.

Termination

In the event that either employer or employee wishes to end an open ended employment contract in Turkey, they can do so as long as adequate notice periods are given. For those who have worked for six months or less the notice period is two weeks, and this increases progressively up to eight weeks for those who have worked for three years or more. Having said this, employers can terminate an employment contract with immediate effect

Understand international employment law

Learn more about HR and payroll law across the globe with our downloadable guide. We cover everything from international parental leave schemes to varying tax laws.

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FMP’s Turkish Payroll and HR Solutions

Any company owner looking to expand their business into Istanbul, Ankara, Izmir or another of Turkey’s big cities, must make sure they are aware of all Turkey’s employment law. Understanding the local laws of international destinations like Turkey can be a challenge, however it is of the utmost importance especially when doing business abroad. To avoid non-compliance, seek advice from the experts here at FMP. Our services include:

  • Payroll processing
  • Multi-currency payroll
  • Multi-language payroll
  • Emailed payslips
  • Payroll audits
  • Pension and social security contributions
  • Holiday, maternity, and sick leave
  • Overseas money transfers
  • Employment contracts
  • HR consultancy
  • Translation services
  • Local law consultation
  • End-of-tear tax administration

Stay compliant with Turkish employment law with FMP’s expertise

Avoid added stress at this critical time for your business expansion, by seeking advice regarding Turkish law from the experienced team at FMP. Get in touch to find out more.

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