How to Hire Remote Employees In 

Turkey

The Basics

Currency
Turkish Lira (TRY)
Employer Taxes
22.5%
Payroll Frequency
Monthly
Official Language
Turkish

Employment in 

Turkey

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 

Turkey

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Turkey can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Turkey, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Turkey.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Turkey is not the same as paying workers in your own country. Employees have to be paid using Turkey’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Turkey

 Specific Information

Working Hours

A workweek is 45 hours. Hours can be distributed unevenly over the work days provided no single day lasts longer than 11 hours.

Overtime

Hours worked over 45 in a week are overtime and paid 150% of a regular salary. Hours worked during the weekend are paid at 200%.

Payroll Tax

Employer

Employer

  • Short Term Insurance Branch Premium
  • Pension & Disability
  • General Health Insurance
  • Unemployment Insurance

Employee

  • 0-24,000 - 15%
  • 650,001+ - 40%

Minimum Wage

The gross minimum wage in Turkey is now 3577.50 TRY.

Payroll

Pay Cycle

The payroll cycle is monthly. Work between the first and last day of the month is typically paid on the last day of the month.

13th Salary

There is no 13th salary.

Leave

Paid Time Off (PTO)

Paid time off increases with seniority:

14 days for those with 1-5 years’ service.

20 days for those with 6-14 years’ service.

26 days for those with 15+ years’ service.

Employees over 50 automatically get 20 days. Those who work underground get an additional 4 days to their level of service. 

The employer must pay the annual leave entitlement as a lump sum or as an advance payment before the beginning of the leave.

Public Holidays

There are 14 public holidays per year.

Sick Days

There is no mandatory obligation for the employer to pay the employee salary during sick leave. After 3 days of sick leave, the Social Security will pay the employee. In practice, many employers pay regular salary for the first 2 days (which are not covered by the SS) or even for the entire period of sick leave (and get partial refund when paid by SS). After 6 weeks of sick leave, the employer is entitled to terminate the employee’s employment.

Maternity Leave

Working mothers are entitled to up to 16 weeks of maternity leave at full pay. Up to 8 weeks out of this leave may be used prior to their child’s birth. At least 3 weeks must be taken before the due date. In the case of premature or multiple births, the total maternity leave will be 18 weeks. Payment during maternity leave comes from social security according to the regular contributions of the employee.

Paternity Leave

The father is entitled to 5 days of paternity leave.

During paternity leave the employee receives regular salary, paid by the employer.

Parental Leave

If both parents are employed, they are entitled to work part-time until the child starts primary school. The employee is required to provide an employer with written notice of the request at least a month in advance.

Parents are also entitled to up to 10 days of leave to attend treatment/medical appointments for a child with a disability or chronic disease.

Other Leave

Military leave: Employees are entitled to up to 90 days of paid leave per year when called up for military exercises or the performance of a statutory obligation, other than compulsory military service.

Marriage Leave

3 days, subject to presenting an official approval of marriage date.

Bereavement Leave

3 days, with respect to losing a close relative such as parent or child.

Termination

Termination Process

There is an obligation to provide a reason for terminating an employee’s employment.  

The reason must relate to the capacity or conduct of the employee or based on the operational requirements of the undertaking. 

There are exclusions to such obligations, including:  

Fix term contract; employees who worked less than 6 months; an employer who employs less than 30 employees; employer’s representatives and his assistants authorized to manage the entire enterprise. In such cases no need to provide a just reason for dismissal, but the employer is still obligated to avoid abusive or discriminating dismissal.

Notice Period

Notice is determined by seniority:

0 – 6 months 2 weeks

6 – 18 months 4 weeks

18 – 36 months 6 weeks

More than 36 months 8 weeks

Severance Pay

Generally, employees who worked more than 1 year and were unfairly dismissed (or resigned due to just cause) are entitled to severance pay. The maximum amount of such payment varies according to the specific salary and up to the amount of 6,730.15 TRL per annum (for 2020), multiplied by the number of years that the employee worked for the employer.  

Probation Period

The probation period is limited to 2 months.