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Although the Republic of Turkey has only existed since 1923, the area’s history stretches back thousands of years. Today, Turkey is home to 84.3 million people, many of whom are under the age of 24. The country is relatively young and well-educated compared to other places globally, making it an ideal place to hire if you’re looking to grow your company internationally. Before you get started, you’ll need to know the steps to hiring in Turkey and a few other key considerations.
What to know before hiring in Turkey
Since the start of the 21st century, Turkey has experienced considerable economic growth. Its employment levels and individual incomes have increased, placing the country in the upper-middle-income category. Turkey was one of the few countries that saw economic growth in 2020. In the third quarter of 2021, the country’s economy grew by 7.4 percent.
As your company prepares to hire people in Turkey, here’s what you need to know about employee education levels, the employment rate, and labor laws in the country.
Education in Turkey
Turkey is known for its high education rates. Compulsory education begins at the age of 5.5 and continues for 12 years. Education in Turkey isn’t just compulsory. It’s considered a right and is offered for free. The country’s mandatory education system is divided into three parts. The first four years are elementary education, the following four are middle school, and the last four are secondary education.
Many students enroll in higher education once they finish secondary education programs. Turkey is home to 209 universities, including public and private schools. Eight million students are enrolled in post-secondary education, most in undergraduate-level courses. The country has the most students in the European Higher Education Area.
While many choose to study in their home country, a considerable number of students from Turkey travel abroad for higher education. For example, in 2020, nearly 10,000 students from Turkey enrolled in universities in the U.S.
Job market and industry in Turkey
Turkey has a relatively high unemployment rate of above 11 percent as of September 2021. Between January and July 2021, the country added 3 million jobs, raising its employment levels to almost the amount it had before the pandemic began. Around 52 percent of the country’s population currently participates in the labor force, which is relatively low.
Depending on who you ask, Turkey is either an emerging market or a newly industrialized country. One of the biggest industries in Turkey is agriculture. The country has produced all of its food since the 1980s. Today, Turkey is one of the world’s leading producers of hazelnuts, cherries, and figs.
Tourism is another primary industry in Turkey. Every year, millions of people visit the country, many coming from nearby Russia or Germany. Given the country’s long history, it’s home to several UNESCO World Heritage sites and two of the Seven Wonders of the Ancient World.
A third primary industry in Turkey is manufacturing. The manufacturing industry consists of public and private sector companies. Textiles are among the top products made in the country.
Taxes in Turkey
Turkey is neither one of the countries with the highest tax rate nor among the countries with the lowest taxes.
How much a person pays in income taxes depends on their residence status and earnings. Residents of Turkey are charged tax on their income from all sources. Nonresidents only need to pay Turkey tax on income they earned in the country. Turkey has a progressive tax system with 15 to 40 percent rates.
Individuals who earn less than 32,000 Turkish lira (TRY) pay a 15 percent tax rate. Those who make more than TRY 880,000 pay TRY 281,500 plus 40 percent on the amount over TRY 880,000.
A company’s share of payroll taxes in Turkey amounts to 22.5 percent of an employee’s salary. Employers need to contribute 20.5 percent of an employee’s salary toward social security and 2 percent toward unemployment insurance.
Employees also need to pay a share of payroll taxes. The employee tax rate in Turkey is 14 percent toward social security and 1 percent toward unemployment insurance. Social security taxes in Turkey cover health insurance, disability insurance, pensions, and short-term insurance.
All told, the average employee in Turkey pays just under 30 percent of their salary toward taxes, taking home around 70 percent of their earnings.
Working hours and time off in Turkey
In Turkey, the working week can be a maximum of 45 hours. Employees can work no more than 11 hours a day and need to have a 24-hour rest period at some point during the working week. To work more than 45 hours per week, an employee must give consent in writing. In some cases, consent can be given through an employment contract.
Turkey allows up to 270 hours of overtime in a year. If an employee does work overtime, defined as more than 45 hours in one week, they should receive 1.5 times their pay rate.
In cases where an employee’s working week is less than 45 hours, they will receive overtime pay at a rate of 1.25 times their regular rate for any hours worked between their usual working week and 45 hours. If they work more than 45 hours, they’ll receive their pay at 1.5 times their regular rate.
The labor law in Turkey has built-in rest periods throughout the working day. Employees are entitled to one 15-minute break after working four hours. They get a 30-minute break if they work 7.5 hours. If their workday is longer than 7.5 hours, they get a one-hour break.
After working with an employer for one year, employees are entitled to paid time off. After one year of employment, an employee is entitled to a minimum of 14 days of paid time off. Once an employee has been with a company for at least five years, they are entitled to 20 days of paid time off. After 15 years, they should receive a minimum of 26 days of paid time off.
Employees over age 50 are entitled to at least 20 days of paid time off.
These paid days should be counted separately from the time an employee receives off for public holidays. Turkey observes the following holidays:
- New Year’s Day (January 1)
- National Sovereignty and Children’s Day (April 23)
- Labor Day (May 1)
- Youth and Sports Day (May 19)
- Democracy and Freedom Day (July 15)
- Victory Day (August 30)
- Republic Day (October 29)
- Ramadan and Eid Holidays (date changes annually)
Costs of hiring an employee in Turkey
When you hire new employees in Turkey, you need to look beyond the salary, taxes, and bonuses your company might pay when calculating expenses. Often, the cost of hiring one employee is several thousand U.S. dollars. Some of the factors that affect costs include:
- Job advertisements: When your company markets its open positions, you might have to pay fees to the various job boards you use to advertise the openings. The costs can vary considerably based on the platforms you use and how long you keep the postings up.
- Recruiter’s fees: You might partner with a recruiter that’s already in Turkey to help you find suitable candidates. Alternatively, you might have an on-staff recruiter who helps your company find the best hires. If you work with an internal recruiter, you’ll need to cover their salary as well as benefits and payroll taxes.
- Pre-employment testing: You might want to issue a skills test to candidates to see if they can handle the job’s tasks. Depending on the type of tests you administer, you might have to pay fees for access or scoring.
- Interviews: Job interviews can come with several expenses. If you interview candidates remotely, you might need to pay for a video conferencing subscription. If you bring the candidates to you, you might have to pay for their meals, hotel, and travel. If you travel to the candidates, you’ll have to cover the cost of your travel, hotels, and food.
Beyond the cost of hiring an employee in Turkey, you’ll need to consider salary. The minimum wage in Turkey is TRY 5,004.00, or about USD 337.54, monthly. Some employers also give their employees bonuses, but there aren’t any specific requirements your company will need to follow.
Hiring practices in Turkey
The law in Turkey prevents employers from discriminating against candidates based on the following characteristics:
- Language
- Political opinions
- Race
- Sex
- Philosophical beliefs
- Religion
During the interview process, it’s best to avoid any questions that pertain to these traits. If an employer is found to have discriminated against an employee, the employee can request up to four months’ pay as compensation.
An employer can conduct a background check on an applicant under certain conditions. If the background check would uncover sensitive information, such as criminal records or health status, the applicant needs to give the employer consent. An employer doesn’t need consent to check references or verify an applicant’s education.
You don’t need to give employees a written contract when you hire them. However, within two months of their hiring date, your company needs to give employees a written document that outlines the following:
- Salary
- Working time
- When payday is — typically monthly in Turkey
- The conditions of the work
- Details about when and how the employee can be terminated
What does a company need to hire employees in Turkey?
If you plan to hire employees in Turkey directly, you’ll need to start by taking a few steps to get your company up and running in the country. One of the first tasks you’ll need to complete is submitting your company’s articles of association and getting your temporary tax identification number. Next, you’ll need to register your company at the Trade Registry Office, submit a list of managers, and pay the appropriate fees. The list of managers is required if you want to get a Working Place and Operations permit, and it must be notarized.
Next, you’ll need to get a Working Place and Operation permit and register with the tax office and Social Security Institution. You will need to register with Social Security before you hire anyone. You’ll also need to contact the Social Security Institution before a new hire’s first day of work.
You can establish your business as a limited liability company (LLC) or a joint-stock company (JSC). The process of setting up an LLC or JSC is similar, but the financial requirements are different. Another option is to choose a non-corporate form for your company, such as a joint partnership or limited partnership.
Hiring remote employees in Turkey
In 2021, Turkey introduced rules for remote work for the first time. The Regulation on Remote Work was added to the country’s labor law in March 2021. It regulates how employers onboard and hire remote employees.
Under the regulation, an employee needs to have a written contract with an employer before they start working remotely. The contract needs to define the work, explain how long the remote work will last, detail an employee’s working hours, and describe the tools and equipment an employer will give an employee. The contract also needs to describe the employee’s salary and how they will be paid.
The remote work arrangement needs to be something both the employee and employer agree on. An employer can’t unilaterally decide to call a remote employee into an office or to have a previously on-site employee begin to work remotely.
Under the regulation, an employer and employee also need to agree to the cost of working remotely, such as the cost of setting up a work area in an employee’s home.
Globalization Partners can help you hire employees in Turkey
If your company is interested in hiring in Turkey and you want want to start working with employees there sooner rather than later, partnering with an Employer of Record (EOR) is the way to go. You can bypass the process of establishing your own company in-country and hire through an entity that’s already set up and compliant.
Globalization Partners offers EOR services in Turkey and more than 180 other countries. Through our global employment platform, we’ll ensure that your employees are paid in accordance with Turkish labor law and that the appropriate taxes are withheld. To start hiring in Turkey in a matter of days, contact us to request a quote.
