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
Sources
Statutory rates and rules verified against the following authorities. We update this page when rates change.