TL;DR, Hiring in Turkey
- Fully-loaded employer cost: ~22.75% on capped wages (5-point incentive often brings it to ~17.75%)
- Severance pay (kıdem tazminatı): 1 month per year, no cap on tenure, capped per-month at the severance ceiling
- Hyperinflation environment; salaries renegotiate every 6 months; FX-linked contracts increasingly common
- Mandatory 14-day annual leave (15 days at 5+ years, 20 days at 15+ years)
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Statutory employer costs in Turkey
In Turkey, employer statutory contributions to SGK (Social Security Institution) total 20.75% (long-term insurance 11%, short-term 2%, health 7.5%, unemployment 0.25%) plus unemployment insurance employer contribution 2%, combined 22.75% on capped earnings. The 5-percentage-point incentive (Law 5510 §81/I) reduces this to 17.75% for compliant employers. The contribution ceiling sits at 7.5× the gross minimum wage (~TRY 1.47M/yr in 2025). Severance (kıdem tazminatı) is the dominant exit cost: 1 month per year with no tenure cap.
| Contribution | Employer rate | Notes |
|---|---|---|
| SGK long-term insurance (pension) | 11.0% | Employer share. Capped at 7.5× minimum wage. |
| SGK short-term insurance (work injury + maternity) | 2.0% | Employer-only. Capped at SGK ceiling. |
| SGK general health insurance (GSS) | 7.5% | Employer share. Funds national health system. |
| Unemployment insurance (İşsizlik Sigortası) | 2.0% | Employer share (employee adds 1%, state adds 1%). Capped at SGK ceiling. |
| 5-point incentive (Law 5510 §81/I) | −5.0% | Compliant employers (no overdue SGK debt, up-to-date filings) receive a 5 pp reduction on the long-term insurance portion. |
Mandatory employee benefits
Beyond statutory contributions, Turkey law requires the following benefits the employer must fund.
- Annual leave
- İş Kanunu Art. 53: 14 days (1–5 years), 20 days (5–15 years), 26 days (15+ years). Pro-rated on tenure of <1 year is not statutory but commonly granted.
- Public holidays
- ~15.5 days per year including Eid al-Fitr (3.5), Eid al-Adha (4.5), Republic Day (1.5), and Atatürk Memorial Day (1).
- Sick leave
- First 2 days unpaid by SGK; from day 3 SGK pays ~2/3 of insurable wage. Most employers top-up to full salary by collective agreement or contract.
- Severance pay fund (Kıdem Tazminatı Fonu)
- Long-pending reform to convert kıdem tazminatı into a funded scheme. Currently still on the books as the lump-sum exit payment described in termination.
Termination, notice and severance
Probation
Maximum 2 months under İş Kanunu Art. 15, extendable to 4 months by collective bargaining. Termination during probation requires no notice or severance.
Notice period
Tenure-stepped under Art. 17: 2 weeks (<6 months), 4 weeks (6 months–1.5 yrs), 6 weeks (1.5–3 yrs), 8 weeks (>3 yrs). Pay in lieu permitted (ihbar tazminatı).
Severance
Kıdem tazminatı under Art. 14 of the prior Labour Code (still in force): 1 month of gross salary per completed year of service on employer-initiated termination, employee resignation due to specific causes (military service, marriage for women within 1 year, retirement), or termination for non-misconduct reasons. NO tenure cap. Per-month amount capped at the severance ceiling (TRY 47,304/month in early 2025, indexed each January). Inflation-adjusted, a 10-year hire's exit cost is meaningful.
Common compliance pitfalls
- Severance has no tenure cap. A 20-year veteran on TRY 80,000/month gross is owed TRY 20 × min(80,000, severance ceiling), potentially TRY 1M+. Foreign employers regularly under-budget this.
- Hyperinflation (CPI 65%+ in 2022–2024, slowing in 2025) means salaries are renegotiated every 6 months. Contracts denominated in USD or EUR (allowed only for certain export-oriented sectors per Decree 32) are increasingly common but require careful structuring.
- The 5-point SGK incentive can be lost retroactively for late filings or unpaid contributions, with arrears collected. EORs should confirm their SGK compliance status before promising the reduced rate.
- Notice (ihbar) and severance (kıdem) are separate exit costs; both apply to no-fault termination. Combined, a 5-year veteran's exit can total 5 + 1.5 = 6.5 months of salary.
Frequently asked questions
EOR platform fees for Turkey range from $199–$699 per employee per month. On top, employer SGK contributions are 22.75% of capped wages (or 17.75% with the 5-point incentive). The dominant cost is severance accrual at ~8.3% of salary per year (1 month/year, uncapped on tenure), which compounds significantly for long-tenured hires.
Severance pay equal to one full month of the employee's last gross salary for each completed year of service, paid on most no-fault terminations and certain qualifying employee resignations (military service, marriage for women within 1 year, retirement). There is no tenure cap, but the per-month amount is capped at the annually indexed severance ceiling (TRY 47,304/month in early 2025).
Most Turkish contracts now include 6-month salary review clauses tied to CPI or sectoral collective agreements. Decree 32 (1989) generally prohibits domestic contracts denominated in foreign currency, but exceptions exist for export-oriented or international-services sectors. EORs working with foreign HQs often pay base salary in TRY indexed to USD or EUR per a written FX clause.
Under Law 5510 §81/I, employers in compliance with SGK obligations (no overdue contributions, timely filings, no labour-law penalties) receive a 5 percentage point reduction on the 20.75% employer SGK rate, bringing it to 15.75%; combined with the 2% unemployment insurance, effective rate becomes 17.75%. Loss of compliance results in retroactive arrears.
Yes, but the burden of proof is on the employer. Performance-based dismissal requires documented warnings, performance improvement plan, demonstration of inability to meet reasonable expectations, and (for workplaces with 30+ employees) a 'just cause' standard. Wrongful dismissal under Art. 18–21 of İş Kanunu can result in reinstatement plus 4–8 months' wages.
Sources
Statutory rates and rules verified against the following authorities. We update this page when rates change.