Turkey is only two or three hours from many major European destinations, and it’s often seen as a bridge between the European Union (EU) and Asia. With tax and non-tax incentives for foreign investors, Turkey is friendly to foreign incorporation and is a great location for companies looking to expand.
However, expansions also come with challenges such as setting up payroll. As a global PEO, Globalization Partners offers Turkey payroll outsourcing to help you start working faster without the hassle of compliance. We’ll act as an extension of your team and handle everything from hiring employees to sourcing the right benefits.
Turkey Taxation Rules
Employers and employees in Turkey have to contribute social security premiums, but employers pay both portions by deducting taxes from the employee’s salary. Tax contributions include:
- Short-term insurance: 1–6.5%
- Long-term insurance: Employee pays 9%, employer pays 11%
- Unemployment insurance: Employee pays 1%, employer pays 2%, state pays 1%
- Maternity leave: Pregnant women should get 2/3 of their average daily earnings during maternity leave
Turkey Payroll Options
You have several Turkey payroll options to choose from, including:
- Internal: Larger subsidiaries with a long-term commitment to Turkey may want to institute their own internal payroll. You’ll need a big HR staff with this option as well as an expert who can help with compliance.
- Remote: You can use your parent company’s payroll and compensate employees remotely if you want to operate just one payroll among locations, but you’ll need to follow different regulations per country.
- Payroll processing company: Using a Turkey payroll processing company will allow you to invest back into Turkey and outsource your payroll. Your company will still be responsible for compliance and all actions the company takes.
- Fully outsourcing: You can use Turkey payroll outsourcing services through Globalization Partners to outsource both your payroll and compliance. We’ll make sure you can focus on running your company instead of worrying about compliance.
Requirements for Setting up Your Turkey Payroll
You cannot start setting up your Turkey payroll until you have a subsidiary in the country. A subsidiary will allow you to operate much like a resident company and let you hire employees and choose a Turkey payroll option. That said, it can take anywhere from a few weeks to a few months to register your subsidiary. Fortunately, Globalization Partners can cut that time down to as little as a day by using our existing subsidiary.
Entitlement and Termination Terms Needed to Establish Payroll
Turkish labor law includes complicated entitlement and termination terms that you should include in an employment contract before setting up your payroll. Employers are only allowed a maximum two-month probation period, during which time you can terminate an employee without any penalties. Termination severance packages are often steep in the country, and notice periods depend on how long the employee has worked for the company.
Contact Globalization Partners to Get Started
Globalization Partners will help you get started working in Turkey fast. Contact us today for more information about Turkey payroll outsourcing.