Legal and compliance checklist for Employer of Record (EOR) services in Turkey
- Gegidze • გეგიძე | Marketing
- Jun 13
- 13 min read
Table of contents:
Introduction: Why compliance in Turkey isn’t optional
Hiring in Turkey without following local employment rules is like trying to cross Istanbul’s busiest street blindfolded; you might make it, but it won’t be fun.
Turkey isn’t just a hotspot for hot kebabs and stunning coastlines. It’s an economic heavyweight with one of Europe's most compelling talent pools, a fiercely competitive tech industry, and regulatory authorities who take payroll rules personally. Very personally.
Let’s set the scene:
Your brilliant new Turkish backend developer is on Slack, crushing sprints, fixing bugs, and casually mentioning to friends that he’s “freelancing” for your startup.
Except he's not, is he? You’ve got him on a fixed schedule, gave him company gear, and he reports directly to your CTO.
That’s an employee, and Turkish labor authorities love correcting misclassifications, preferably with hefty fines attached.
And that’s just step one.
Consider mandatory employment contracts in flawless Turkish, non-negotiable local payroll (no, paying in euros won't fly), meticulously documented social security filings, and taxes so precise even seasoned CFOs might get anxious.
Slip once, and your next “hire quickly, grow quickly” strategy becomes a courtroom drama, complete with subtitles.
But don’t panic yet. Here’s the good news:
Compliance in Turkey isn’t rocket science. It just requires attention, accuracy, and a reliable partner who knows the rules better than the Turkish revenue inspector who probably dreams about audits.
This guide will walk you through the essential compliance steps when hiring via an Employer of Record (EOR) in Turkey.
Think of it as your personal compliance cheat sheet: fewer penalties, fewer surprises, and way fewer reasons to regret that amazing hire in Istanbul.
Ready to make your Turkish expansion more "success story" and less "cautionary tale"? Let’s dive in.
The big 6: What Turkey’s labor law demands
Turkey’s labor law isn’t an "optional reading" assignment. Think of it more like baking baklava; miss one ingredient, and the entire recipe collapses. Delicious? Yes. Forgiving? Absolutely not.
So let’s break down the six essential rules you absolutely must follow when hiring in Turkey, especially if you're using an Employer of Record (EOR).
Employment contracts: The Turkish language is non-negotiable
You might love your standard English employment contract, but the Turkish labor authorities don't.
Every employment contract in Turkey must:
Be written in clear, correct Turkish (bilingual versions are ideal).
Clearly state salary, working hours, role responsibilities, and termination rules.
Be signed before your new hire starts working.
Miss this? You risk losing IP rights, facing employment lawsuits, or being hit with compliance fines.
Payroll precision: Pay in Turkish Lira, always
In Turkey, payroll must run in Turkish Lira (TRY), through a local payroll system. No euros, dollars, crypto, or anything else creative.
You need to:
Pay salaries via Turkish bank accounts in TRY.
Document payroll clearly with payslips.
Comply with Turkey’s strict monthly payroll schedule.
Mess this up? Expect a tax audit, and Turkish tax authorities aren’t shy about charging penalties and interest.
Social security: Don’t skip the SGK
In Turkey, social security isn't optional. SGK (Social Security Institution) contributions are mandatory and carefully tracked. Both the employer and employee have to contribute monthly.
You’re responsible for:
Ensuring the timely registration of every new hire with SGK.
Paying monthly contributions (around 20.5%–22.5% employer-side).
Withholding and reporting employee contributions clearly.
Ignore this? You risk major financial penalties and potential legal action from Turkish authorities.
Mandatory employee benefits: Not just nice-to-haves
Turkey’s labor laws outline clear, mandatory benefits you can't skip, including:
Paid annual leave (starting from 14 days, increases with tenure).
Paid sick leave and maternity leave (up to 16 weeks of maternity leave).
National holidays (public holidays must be paid and clearly tracked).
If you treat these as optional perks rather than requirements, you're headed straight for a compliance crisis.
Overtime and working hours: Track every minute
Turkey’s workweek is officially capped at 45 hours, usually split into 5 working days. Overtime is tightly regulated and must be compensated appropriately.
Overtime pay is 50% higher than regular hourly pay.
You must document working hours meticulously.
If your employee works beyond official limits without proper compensation, expect disputes and fines.
Try to wing this? You’ll soon find yourself in a Turkish labor court, where employees usually win.
Termination and severance: It's complicated
Firing someone in Turkey isn't as simple as changing their Slack status. You must:
Give clear, legally valid reasons for termination (poor performance, redundancy, etc.).
Provide proper notice (between 2–8 weeks based on tenure).
Pay mandatory severance if they've worked for at least one year.
Document everything carefully, including termination notices, warnings, and payments.
Skip this step? You risk wrongful termination claims, court cases, and heavy fines.
What can go wrong (if you ignore this)
Let’s say you’ve just hired your first developer in Istanbul. The contract is copied from your UK template. The salary is wired in EUR, and the benefits? Uh… you promised to sort those later.
Fast-forward three months, and your “growth milestone” comes with a side of legal letters, labor ministry calls, and an ex-employee demanding compensation in court.
Here’s what ignoring compliance in Turkey actually looks like:
Unregistered contracts = unenforceable IP protection
If your employment contract isn’t written in Turkish and signed before the hire starts, it’s as good as a handshake. That means:
Your IP clauses might not hold.
Confidentiality agreements? Legally worthless.
If the employee walks with your codebase, good luck stopping them.
Misclassified workers = surprise penalties
Hiring someone as a “freelancer” to avoid taxes? Turkish authorities are watching.
If the person:
Reports to a manager
Works set hours
Uses your tools
Appears on team calls
…they’re not a contractor. They’re an employee. And misclassifying them comes with:
Retroactive payroll tax payments
Penalties of up to 25% of the total unpaid dues
Legal action and reputational damage
Incorrect payroll = audit magnet
Paying salaries in euros, skipping payslips, or failing to remit social contributions?
That’s a red flag for the Social Security Institution (SGK) and the Revenue Administration. They can hit you with:
Fines per missed month, per employee
Interest on unpaid taxes
Liability backdated to the hire date
And no, pleading “we’re new here” won’t get you off the hook.
Improper termination = lawsuits
Turkish labor law protects employees aggressively. If you:
Fire someone without proper notice
Skip the paperwork
Forget severance obligations
...you’ll likely face:
Court-ordered compensation
Reinstatement claims
Delays in rehiring due to ongoing legal proceedings
Ignored benefits = disgruntled (and litigious) team
Forget mandatory annual leave, paid sick days, or public holiday pay? You’ll deal with:
Complaints to the Labor Inspectorate
Retroactive benefit payouts
Negative word of mouth in Turkey’s close-knit tech scene
DIY vs PEO vs EOR: Who’s liable?
Let’s say you're hiring in Turkey. The talent is there. The speed to scale is there. But so is the Turkish Labor Code, a 160+ article document that reads like bedtime horror for non-locals.
Here’s the thing: Someone’s responsible for compliance. Payroll filings, tax deductions, severance rules, employment contracts, SGK registrations, and mandatory benefits don’t sort themselves.
And unless you pick the right employment model, that someone is you.
Let’s unpack what each route means for your liability:
DIY Setup in Turkey (Opening your own entity)
Who’s liable? You. For everything.
Setting up a legal entity in Turkey makes you the official employer. That includes all employer responsibilities under Turkish law.
You handle:
Entity incorporation (trade registry, tax office, and SGK registration)
Employment contracts drafted in Turkish with mandatory clauses
Monthly payroll in Turkish lira (TRY) with correct tax/social deductions
Withholding and submitting income tax, SGK premiums, unemployment insurance, and stamp tax
Employee benefits (paid leave, meal card, health insurance, where applicable)
Work permit processes for foreign hires
Termination compliance (notice periods, severance, documentation)
Archiving payroll records and employment files for audits
You skipped a step? You pay.
Late payroll tax? Expect penalties, interest, and potentially a compliance audit by the Revenue Administration (GIB) or SGK.
Who it’s for:
Enterprises with dedicated in-house legal and HR teams and a long-term hiring roadmap in Turkey (usually 15+ hires).
PEO in Turkey (Professional Employer Organization)
Who’s liable? Still you. The PEO just helps.
A PEO handles HR admin like payroll and benefits, but you remain the legal employer. To even engage a PEO in Turkey, you must first set up a Turkish entity.
You must still ensure:
Contracts are fully compliant and enforceable under Turkish law
Payroll and taxes are filed correctly, on time, and with proper documentation
Benefits meet local legal minimums (e.g., 14 days’ paid leave, sick leave, etc.)
Work permits for foreign hires are in order
All personnel files and data policies comply with KVKK (Turkey’s data protection law)
If the PEO messes up?
You’re liable. Because legally, you're the employer of record.
Who it’s for:
Established businesses with a Turkish entity that want local HR admin support, but can stomach shared compliance risk.
EOR in Turkey (Employer of Record)
Who’s liable? The EOR. That’s the whole point.
An EOR becomes the legal employer on your behalf. They take on 100% of the legal responsibility for employment contracts, payroll, tax, benefits, and labor disputes while you control the employee’s daily work.
You don’t need a local entity. You don’t need to read the Turkish Labor Code. You just pay a monthly invoice and get a legally hired, locally compliant employee.
The EOR provider in Turkey handles:
Issuing Turkish-language contracts with enforceable IP/NDAs
Paying salaries in TRY through compliant channels
Calculating and submitting payroll taxes, SGK premiums, and unemployment insurance
Providing mandatory benefits and leave tracking
Navigating any terminations with legally required notice, severance, and documentation
Managing local labor inspections or audits if they arise
You focus on:
Performance, culture, and growth. They handle compliance and paperwork.
Who it’s for:
Startups and scaling companies hiring <20 people in Turkey, testing the market, or expanding fast without opening an entity.
Side-by-side breakdown: DIY vs PEO vs EOR
Feature | DIY Setup | PEO Model | EOR Model |
Local Entity Required | Yes | Yes | No |
Legal Employer | You | You | EOR |
Payroll & Tax Filing | You | Shared | EOR |
Contracts (Language & Clauses) | You | You | EOR |
Employee Liability (Disputes, Claims) | You | You | EOR |
Severance & Termination Compliance | You | You | EOR |
Work Permit Management | You | You | EOR |
KVKK Data Privacy Compliance | You | Shared | EOR |
Time to Hire | 2–4 months | 4–6 weeks | 1–2 weeks |
Audit Exposure | High | Medium | Low |
Long-Term Flexibility | High | Medium | Medium |
Monthly Cost per Employee | Low (no fees) | Medium | High (fixed fee) |
Legal Risk Profile | High | Medium-High | Low |
So... who should choose what?
Choose DIY if you’re building a long-term operation in Turkey with 15+ hires and have legal/HR capacity.
Choose PEO if you already have a Turkish entity and want help with payroll/HR, but are okay being legally exposed.
Choose EOR if you want fast, safe hiring in Turkey without setting up shop, and prefer not to lose sleep over SGK filings.
The 12-point compliance checklist for EOR in Turkey
Remote hiring in Turkey can feel like navigating Istanbul’s Grand Bazaar blindfolded, one wrong turn, and you’ve suddenly overpaid or bought something questionable. Compliance here isn’t about luck; it’s about having a clear, step-by-step playbook.
So, here’s your bulletproof, no-nonsense, sleep-easy compliance checklist for hiring talent in Turkey through an Employer of Record (EOR):
Follow these 12 points precisely, and you’ll never have to Google "Turkish payroll penalties" at 2 AM again.
1. Employment contracts (always in Turkish!)
Mandatory: All contracts must be drafted clearly in Turkish. (Bilingual is allowed, but Turkish is non-negotiable.)
Include explicitly: Job role, salary details (gross and net), working hours, location, probation period (usually 2 months max), termination notice periods, severance terms, confidentiality clauses, and IP assignment.
Sign before employment starts. Retroactive contracts can trigger audits or employment disputes.
2. Payroll payments (strictly in Turkish Lira - TRY)
Payments must be via a local Turkish bank in TRY, no exceptions.
Monthly payroll statements ("bordro") are required and must include clear breakdowns of salary, deductions, taxes, and social contributions.
Payments must follow the monthly payroll calendar precisely. Late payments trigger penalties and attract attention from local authorities.
3. Social security contributions (SGK)
Immediate registration with the Turkish Social Security Institution (SGK) is mandatory from day one.
Employer contributions: Approximately 20.5%–22.5% of gross salary, depending on industry specifics.
Employee contributions: Approximately 14% deducted from gross salary.
Late registration or missed payments mean heavy fines and compliance investigations.
4. Income tax withholding (no mistakes allowed)
Income tax brackets in Turkey are progressive, ranging from 15% to 40% based on total annual salary.
Withhold monthly, remit promptly to the Turkish Revenue Administration (GIB).
Accurate payroll calculation and timely payment are non-negotiable. Mistakes here mean penalties and interest.
5. Stamp duty tax (often overlooked)
Stamp duty: 0.759% of total gross salary.
Payable monthly along with payroll.
Omitting stamp duty payments accumulates fines and triggers audits.
6. Mandatory employee benefits (not optional!)
Paid annual leave: Minimum 14 days for 1–5 years of employment, up to 26 days based on tenure.
Public holidays: At least 15 days annually (including national and religious holidays), fully paid.
Sick leave: Paid by SGK after the third day, but employer generally compensates initial days; official medical documentation required.
Maternity leave: Up to 16 weeks (8 weeks prenatal, 8 weeks postnatal), fully compensated through SGK.
Paternity leave: 5 days of paid leave (mandatory).
7. Overtime and working hours (no casual logging)
Regular working hours are capped at 45 hours per week.
Overtime pay is at least 150% of the regular hourly rate.
Overtime capped at 270 hours annually, documented thoroughly. Non-compliance triggers labor complaints and penalties.
8. Employee termination and severance (heavily regulated)
Minimum notice periods clearly mandated by Turkish labor law:
0–6 months: 2 weeks
6–18 months: 4 weeks
18–36 months: 6 weeks
3+ years: 8 weeks
Severance pay: One month’s gross salary per year of service, calculated precisely and paid immediately upon termination.
All terminations require legally valid reasoning, documented notices, and carefully tracked communications.
9. Probation periods (clearly defined)
Maximum probation period is 2 months.
Probation terms must be explicitly stated in contracts.
Termination within probation period doesn’t eliminate payment obligations (salary and benefits accrued must still be paid).
10. Work permits and immigration (mandatory for foreign hires)
Foreign hires must secure proper work permits through the Ministry of Labor and Social Security before employment starts.
Work permits are employer-specific; changes in role, salary, or employer require new permit applications.
Hiring without proper permits can mean immediate deportation for the employee and heavy fines for the employer.
11. Data protection compliance (KVKK - Turkish GDPR)
Compliance with KVKK (Turkey’s Personal Data Protection Law) is mandatory.
Employees must explicitly consent to personal data collection, storage, and usage.
Employers must maintain secure data storage, limited access, and demonstrate transparency in handling personal data.
Breaches result in hefty fines and serious legal risks.
12. Workplace health and safety (applies to remote too!)
Turkish law mandates that employers provide safe, compliant working environments, even for remote employees.
For remote teams, you must provide the necessary ergonomic equipment and document safety measures clearly.
Any workspace incident, even remote, is the employer’s responsibility if conditions weren’t documented and provided adequately.
Final recap checklist
Task | Responsibility | Consequences if ignored |
Turkish-language Contracts | Employer/EOR | Legal disputes, IP loss |
Payroll (TRY payments) | Employer/EOR | Tax penalties, audit exposure |
SGK Registration | Employer/EOR | Fines, retroactive penalties |
Tax Withholding | Employer/EOR | Financial penalties, interest |
Stamp Duty | Employer/EOR | Accumulated fines |
Employee Benefits | Employer/EOR | Legal action, fines |
Overtime Tracking | Employer/EOR | Disputes, regulatory fines |
Severance and Termination | Employer/EOR | Legal cases, compensation claims |
Probation Clarity | Employer/EOR | Unclear termination rights |
Work Permits (Foreign hires) | Employer/EOR | Deportation, heavy fines |
Data Protection (KVKK) | Employer/EOR | Large financial fines |
Health & Safety Compliance | Employer/EOR | Liability, legal actions |
Hiring in Turkey demands precision, care, and compliance expertise. Miss even one step, and the legal consequences are immediate and expensive.
This is precisely why a reliable Employer of Record (EOR) partner matters. Team Up handles each of these compliance points for you, fully and transparently, so you can hire top Turkish talent without worrying about fines, audits, or lawsuits.
Ready to hire compliantly, effortlessly, and confidently in Turkey?
Can an EOR handle this?
Short answer: yes.
Long answer: yes, and faster, cleaner, and with fewer grey hairs than going it alone.
Let’s cut through the noise. You’re eyeing the Turkish market because the talent’s strong, the time zone fits, and the salaries don’t gut your budget. But then comes the avalanche: mandatory SGK registration, Turkish-language contracts, payroll taxes in lira, and laws that change faster than your dev team’s tech stack.
Now ask yourself: do you really want your CTO triple-checking social security filings or wondering if a probation clause holds up in a Turkish labor court?
Didn’t think so.
That’s where a local Employer of Record (EOR) steps in, and carries the compliance burden on their shoulders so you don’t have to.
Here’s what an EOR in Turkey actually does:
Becomes the legal employer
You still manage the team day-to-day. But the EOR takes care of every legal checkbox, so your developers, designers, or sales reps are fully employed in the eyes of Turkish law.
Handles payroll, taxes & SGK
They process payroll in Turkish lira, withhold income taxes, pay social security contributions, and file everything on time. No missed filings. No penalties. No surprises.
Drafts bulletproof contracts (in Turkish)
Yes, including those must-have clauses that protect your IP, enforce NDAs, and meet every statutory requirement, down to notice periods and severance pay.
Ensures benefits compliance
From paid leave and public holidays to maternity coverage and overtime pay—your EOR guarantees your team gets what Turkish law says they should (and what your reputation depends on).
Manages local risks so you don’t
Any changes to Turkish labor law? They’ll know before your internal team ever would—and adjust accordingly.
Onboards talent fast
You can go from “we found our next hire” to “fully onboarded and compliant” in days, not months.
What does this mean for you?
No Turkish entity.
No tax headaches.
No labor disputes.
No learning curve.
No problem.
Just great talent, managed legally, with none of the risk—and all of the upside.
Want to see how fast you can go live in Turkey with zero compliance stress?
Final thoughts: Stop hoping, start hiring
Hope is not a hiring strategy. Especially not in Turkey.
You can cross your fingers and pray your contracts are airtight.
You can assume payroll will “just work.”
You can trust your local accountant not to miss a filing or skip a social contribution.
But here’s the truth:
Turkish labor law is structured, specific, and ruthlessly enforced.
There are no free passes for fast-scaling startups or global teams “just testing the market.”
The upside?
You don’t need to master every regulation, translate every clause, or build a legal entity just to tap into Turkish talent.
That’s what an Employer of Record (EOR) does for you.
With the right EOR, you can:
Hire in days, not months.
Stay fully compliant, without lifting a legal finger.
Focus on building product and revenue, not dodging red tape.
You’ve just read the checklist.
You’ve seen what can go wrong.
You know what’s at stake.
Now it’s time to act.
We’ll show you exactly how to start hiring in Turkey, legally, fast, and without guesswork.
Less hoping. More hiring. That’s how you scale.
