Hiring Staff in Türkiye as a Foreign Company: Employer Obligations

If your company wants to put someone on payroll in Türkiye, you generally need to register as an employer with the Social Security Institution (Sosyal Güvenlik Kurumu, "SGK"), declare and pay monthly social-security premiums for each worker, run a compliant payroll, and withhold income tax and stamp tax from wages. These duties flow mainly from the Turkish Labour Law (İş Kanunu No. 4857), the Social Insurance and General Health Insurance Law (No. 5510), and Turkish tax legislation. This guide explains, in plain terms, what a foreign company must do to hire correctly in Türkiye, when you can employ without setting up a Turkish entity, and why getting the setup right from day one protects your business. Specific figures, rates and deadlines change often, so treat the numbers here as a starting point and confirm them with a Turkish lawyer and accountant before you rely on them.

The Short Answer: What a Foreign Employer Must Do

If you employ someone in Türkiye, the law treats you like any Turkish employer. At a high level, you must:

• Register as an employer with the SGK and open a workplace registration (işyeri) before staff start.
• Declare each worker to the SGK on an entry notice (işe giriş bildirgesi) before the first day of work.
• Run a compliant payroll each month, a written, itemised payslip is expected.
• File the monthly declaration and pay SGK premiums on the worker's gross wage.
• Withhold income tax and stamp tax from wages and pay them to the tax office.
• Respect the statutory floor, minimum wage, working-time limits, paid leave, notice and severance.

These obligations rest principally on the Turkish Labour Law (İş Kanunu No. 4857) for the employment relationship, the Social Insurance and General Health Insurance Law (No. 5510) for social security, and the income-tax and stamp-tax codes for payroll withholding. The sections below walk through each one.

Registering as an Employer with the SGK

Social security is the first building block. Before your first employee starts, you must register the workplace with the Social Security Institution (Sosyal Güvenlik Kurumu, SGK) and obtain a workplace registration number. This is the framework set by Law No. 5510 on Social Insurance and General Health Insurance.

Registration is usually handled electronically and, in practice, through your Turkish accountant or payroll provider, who acts under a power of attorney. As part of, or alongside, registration you will:

• Open the workplace (işyeri) file with the SGK for the place where the work is performed;
• Submit the employee entry notice (işe giriş bildirgesi) for each worker, which the law requires before the employee begins work; and
• Set up the monthly declaration cycle described below.

If you have no Turkish entity yet

SGK employer registration is normally tied to a registered workplace in Türkiye, which usually means you need a local presence, a company, a branch, or a liaison office. If you do not have one, see the section below on employing without a Turkish entity. Whether a particular structure can register as an employer is exactly the kind of point to confirm with Turkish counsel for your facts.

Monthly SGK Premiums and Declarations

Once registered, the employer's recurring duty is to declare each employee's work and earnings and pay social-security premiums every month. Premiums are calculated as a percentage of the worker's gross wage and are split into an employer share and an employee share, the employer deducts the employee's share from the payslip and pays the combined amount to the SGK.

Each month you file a combined premium and service declaration (the muhtasar ve prim hizmet beyannamesi, which merges the old payroll-withholding return and the SGK declaration into a single filing). It reports, for each worker, the days worked and the earnings on which premiums are due.

Two practical points foreign employers often miss:

• Premiums are based on gross wage, within a floor and a ceiling. There is a lower earnings base (linked to the minimum wage) and an upper ceiling on premium-bearing earnings. Both are reset periodically.
• The employee's share is withheld, not added on top. When you agree a "gross" salary, the employee's SGK share and income tax come out of it; the employer pays its own SGK share on top. Modelling cost on net pay alone understates the true employer cost.

Payroll, Income Tax and Stamp Tax (High Level)

Turkish wages are taxed at source. Beyond SGK premiums, the employer must withhold income tax and stamp tax from the payslip and remit them to the tax office. This is a withholding duty, the employer collects the tax from the employee's wage and pays it over, rather than the employee filing and paying separately.

• Income tax withholding (gelir vergisi stopajı). Wage income is subject to income tax under the Income Tax Law (Gelir Vergisi Kanunu No. 193) at progressive rates, withheld monthly by the employer.
• Stamp tax (damga vergisi). Payroll is generally subject to stamp tax under the Stamp Tax Law (Damga Vergisi Kanunu No. 488), withheld as a small percentage of the payroll.
• Minimum-wage relief. Türkiye has, in recent years, exempted earnings up to the minimum-wage level from income tax and stamp tax for wage earners. Whether and how this applies in a given year is set by legislation and changes, so confirm the current position.

Because SGK and tax withholding are now reported together in the combined monthly declaration, payroll, social security and tax are best handled by one coordinated provider, with your lawyer reviewing the employment contracts that sit underneath.

Minimum Wage, Working Time and Statutory Benefits

Turkish employment law sets a floor that you cannot contract below. The headline items under the Turkish Labour Law (İş Kanunu No. 4857) are:

• National minimum wage. A gross minimum wage is set for the whole country (and revised periodically). No employee may be paid below it.
• Working time. Weekly working time is capped (commonly stated as 45 hours), with overtime paid at a statutory premium above the normal rate.
• Paid annual leave. Employees with at least one year of service are entitled to paid annual leave, increasing with seniority.
• Notice periods. On termination, statutory notice periods (scaled by length of service) apply, or payment in lieu.
• Severance pay (kıdem tazminatı). An employee who qualifies, broadly, at least one year of service and a termination that triggers the right, is entitled to severance, calculated on length of service and capped by a periodically updated ceiling.

For foreign nationals you employ in Türkiye, there is an additional layer: most foreign employees need a work permit under the International Labour Force Law (Uluslararası İşgücü Kanunu No. 6735), and the work permit itself acts as their residence basis. Hiring a foreign worker therefore combines the employer duties above with a separate permit process, plan for both.

Can You Employ in Türkiye Without a Local Entity?

Sometimes, but with real limits. Foreign companies often ask whether they can hire a person in Türkiye without first setting up a Turkish company. There are a few routes, each with trade-offs:

• Set up a Turkish entity or branch. The cleanest long-term answer. A limited company (limited şirket) or branch can register with the SGK as an employer and run compliant payroll directly. This is usually the right structure once you have ongoing staff or revenue in Türkiye.
• Use an employer of record (EOR). A third party that already has a Turkish entity formally employs the person on your behalf and handles SGK, payroll and tax, while the worker does day-to-day work for you. This avoids forming your own entity, but you must check the arrangement against Turkish labour-supply and co-employment rules, and accept that you are not the legal employer.
• Keep the role genuinely cross-border. If a person is truly employed and based abroad and only travels in, that may not create a Turkish employer obligation, but a role that is really performed in Türkiye, day to day, can pull you into Turkish employment, social-security and tax obligations even without a local office. The substance, not the contract heading, controls.

Why Getting the Setup Right Protects Your Company

Correct setup is not box-ticking, it is risk management. A foreign company that registers properly, runs clean payroll, and withholds tax and premiums on time avoids the failure modes that turn a simple hire into a liability:

• Administrative fines. Late or missing SGK registration and declarations, and late tax filings, carry monetary penalties under Law No. 5510 and the tax codes.
• Back-premium and back-tax claims. An informal arrangement that is later treated as employment can produce a demand for unpaid premiums and withholding, with interest, covering the whole period.
• Employee lawsuits. Misclassified or under-documented workers can claim unpaid notice, severance, annual leave and overtime. Turkish employment disputes also pass through mandatory mediation before most lawsuits.
• Permit exposure. Employing a foreign national without the required work permit under Law No. 6735 can trigger separate penalties for the employer.

The reassuring part is that the compliant path is well-trodden and predictable. With a registered employer file, a competent payroll provider, and contracts drafted to Turkish law, the monthly cycle becomes routine. The expensive scenarios almost always trace back to skipping the setup, not to the setup itself. To see how the rules keep shifting, our note on recent developments in Turkish employment law is a useful companion.

If you are planning to hire in Türkiye, our team can map the right structure for your situation, register the employer, and coordinate payroll, social security and the work-permit process with your accountant. Contact us to discuss your hiring plans.

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