4. Types of leave

There is no information about the types of leave for this country.
Learn more about types of leave >

Paid time off

Employees in Turkey are entitled to vacation time depending on the duration of their employment. Employees with one to five years of employment are entitled to 14 days of annual leave every year. The number rises to 20 days for workers with five to fifteen years of service and to 26 days for those with sixteen years or more of service. Young employees, workers over the age of 50, miners, and those who operate underground are subject to special regulations.

Public holidays

Turkey recognizes 16 national public holidays.

Sick days

The company is not required to pay the employee's wage while he or she is on sick leave. The employee will be paid by Social Security after three days of sick absence. In actuality, many firms provide ordinary wages for the first two days of sick leave (which are not covered by the Social Security system) or even the full time of sick leave (and get partial refund when paid by SS). The employer has the right to terminate the employee's employment after 6 weeks of sick leave.

Maternity leave

Working women have the right to up to 16 weeks of paid maternity leave. Prior to the birth of their kid, they may take up to 8 weeks of this leave. At least three weeks must pass before the deadline. The total maternity leave will be 18 weeks if the baby is born prematurely or in multiples. Payment for maternity leave is provided by social security, based on the employee's regular payments.

Paternity leave

The company is not required to pay the employee's wage while he or she is on sick leave. The employee will be paid by Social Security after three days of sick absence. In actuality, many firms provide ordinary wages for the first two days of sick leave (which are not covered by the Social Security system) or even the full time of sick leave (and get partial refund when paid by SS). The employer has the right to terminate the employee's employment after 6 weeks of sick leave.

Parental leave

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

Other leave

Bereavement leave. 3 days, with respect to losing a close relative such as parent/ child.

5. Employment termination

There is no information about employment information for this country.

Termination process

Employers with more than 30 employees in Turkey have the legal right to fire employees who have worked for them for more than six months for a legally valid reason. Employees must receive a written termination notice that details the basis for the termination. The notice period is two to eight weeks, depending on the duration of employment of the employee.

For collective redundancies and disciplinary dismissals, special rules apply. Employees with at least one year of service are often entitled to severance pay. Severance pay is equivalent to one month's salary for each year of service. Employees also receive money for unused leave and other benefits, allowances, and premiums received throughout their employment.

Notice period

Seniority dictates the notice period. The notice period is two weeks for employees with up to six months of seniority. If the seniority is between six and eighteen months, a four-week notice period is required. If the employee has between eighteen and thirty-six months of seniority, the employee will be notified six weeks in advance. Finally, if an employee has worked for the company for more than thirty-six months, they are entitled to a notice period of eight weeks.

Probation period

Probation is limited to two months.

Severance pay

Employees who have worked for more than one year and have been unfairly dismissed (or have resigned for just cause) are generally entitled to severance pay. The maximum amount of such payment varies according to the specific salary and may not exceed 6,730.15 Turkish lira per year (in 2020), multiplied by the number of years worked for the employer.

6. Working hours

There is no information about the working hours for this country.

General working schedule

Five days per week is the standard workweek, with employees working a maximum of 45 hours per week. Although there is no set schedule for working hours throughout the week, employees are limited to 11 hours in a single day. Underground employment, such as mining, is restricted to six hours per day and 36 hours per week.

Overtime

Overtime is defined as time worked in excess of these limits and is limited to 270 hours per year with the employee's consent. Overtime is compensated at a rate of 150 percent of the regular salary. Weekend hours are paid at a rate of 200 percent.

7. Minimum wage

There is no information about the working hours for this country.

Turkey sets a national minimum wage of 440.29 EUR per month.

8. Employee benefits

There is no information about the working hours for this country.

Turkey's healthcare system is a hybrid of mandatory health insurance and private medical insurance. The Ministry of Health is in charge of managing all health and social welfare operations, and all people are entitled to social security under the Turkish Constitution. The public healthcare system is funded through public health insurance, which is taken automatically from workers' paychecks.

Some companies provide food vouchers or cash allowances, as well as corporate vehicles and/or private healthcare.

9. Taxes

There is no information about the working hours for this country.

Corporate tax

Corporations must pay CIT at a rate of 22 percent on net profits earned in 2018, 2019, and 2020, after deducting exemptions and deductions and incorporating prior-year losses carried over to a certain degree.

Income taxes in Turkey varies considerably depending on the taxpayer's place of residence, according to Turkish tax law. Resident entities are taxed on their global revenue, while non-resident companies are only taxed on income generated in Turkey.

Individual income tax

Residents in Turkey are taxed on their global income, while non-residents are solely taxed on their earnings in Turkey. Income tax is paid at progressive rates on taxable income after various deductions and allowances. Expats are not subject to a specific tax system.

For a taxable income of up to TRY 24,000, the tax rate is 15 percent. 

For a taxable income between TRY 24,000 to TRY 53,000, the tax rate is 20 percent. 

For a taxable income between TRY 53,000 to TRY 190,000, the tax rate is 27 percent. 

For a taxable income between try 190,000 and TRY 650,000, the tax rate is 35 percent. 

For a taxable income over TRY 650,000, the tax rate is 40 percent. 

VAT, GST and sales tax

Deliveries of goods and services are subject to VAT at rates ranging from 1% to 18%. The national average is 18%.

VAT paid on local purchases and imports is referred to as 'input VAT,' while VAT computed and collected on sales is referred to as 'output VAT.' In the VAT return submitted with the relevant tax agency, input VAT is offset against output VAT. If output VAT exceeds input VAT, the difference is remitted to the appropriate tax agency. If input VAT exceeds output VAT, the difference is carried over to the next month and adjusted against future output VAT. Except in a few cases, such as exportation and sales to an investment incentive holder, there is no cash return available to recoup excess input VAT.

Turkish VAT principles include a'reverse-charge VAT system,' which compels resident companies to calculate VAT on payments made to individuals in other countries. The resident entity calculates and pays VAT to the relevant tax agency under this method. This VAT is treated as input VAT by the resident entity and is offset in the same month. Except for the cash flow impact on the former if there is insufficient production VAT to balance the input VAT, this VAT imposes no tax burden on the resident or non-resident business.

VAT is collected at the point of importation as well. The VAT rate is the same as the rate applied to transactions in the country of origin. The worth of the items for customs tax purposes, plus any kind of tax payed at the time of import, plus any expenditures spent until the single administrative document is registered, is the VAT base.

The reduced rate is 1% for deliveries and services specified in List No. I (e.g., agricultural items such as raw cotton, dried hazelnuts, supply and leasing of commodities within the scope of the Finance Leasing Law).

The reduced cost is 8% for deliveries and services specified in List No. II (e.g., essential food stuffs, textiles, books and similar publications).

10. VISA and work permits

There is no information about the working hours for this country.

A Turkish Work Visa allows foreigners to go to Turkey for the purpose of finding work. Foreigners are not permitted to work in Turkey unless they have a work visa and a work permit. Aside from Turkish Republic of Northern Cyprus nationals, all citizens must have a work visa and a work permit to work in Turkey.

In Turkey, applications cannot be accepted unless there is a firm employment offer.

The application must be submitted to the Turkish embassy or consulate in the foreigner's home country. The new employer must provide supplementary paperwork to the Turkish Ministry of Labour and Social Security within ten days after filing the application (MLSS).

11. Employer Of Record service terms

There is no information about the working hours for this country.

Employment contracts

In Turkey, an employment contract may be created orally, however it is highly advised that it be in writing. If the contract is for longer than one year, it must be in writing. If a business company headquartered in Turkey is a party to the contract and the contract will be executed in Turkey, written contracts must be in Turkish. A written contract does not have to take any particular form, but the following clauses must either be included in the written contract or revealed to the employee in writing within two months of the commencement of employment:

Working conditions for employees

Working hours might be daily or weekly.

Pay and any additional remuneration received by the employee, as well as the intervals at which they will be received

Contract duration

Contract termination terms and conditions

Minimum assignment length

There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.

Payment currency

Turkish Lira

13.Opening a subsidiary in Turkey

There is no information about the working hours for this country.

How to set up a subsidiary

Before beginning the process of establishing a Turkey subsidiary, many significant decisions must be made. To begin, we suggest looking at numerous locations in Turkey for your physical office. Distinct locations or localities may have different Turkey subsidiary laws, which influence how simple or difficult it is to incorporate. Choosing the proper city can help you get off to a good start and may provide better prices and availability.

The next step is to investigate the various entities that may be used in the Turkey subsidiary formation procedure. The commercial law of the nation provides for five alternative structures, including a joint stock company, a limited liability company (LLC), a collective business, a partnership by shares, and a corporate association. Many businesses adopt the LLC form; doing so will shield your parent and subsidiary from each other's acts.

The following are the processes to establishing your Turkey subsidiary as an LLC:

1. Articles of association must be submitted for both the parent firm and the new organization.

2. Making copies of passports for all of the subsidiary's management

3. Signing a statement from the managers indicating their acceptance of their new roles

4. Purchasing commercial books via the agent of the subsidiary

5. Opening a local bank account and making a minimum share capital deposit

6. All papers must be notarized and submitted to the Turkish Trade Register.

Subsidiary laws

Turkey's subsidiary laws may vary depending on the entity you choose. For example, in order to be formed, an LLC must have a minimum share capital of 10,000 Turkish Lira. To register the corporation, you'll also need at least one founder or shareholder, who might be a natural person or a legal entity. Shareholders' liability is restricted dependent on how much they contribute.

There are no constraints on the number of stockholders, but there are no restrictions on their nationality. LLCs will also need the appointment of one or more managers by the chairman of the board. Board members are not required to attend meetings in person and may do so remotely if they do not reside in Turkey. Because LLCs enjoy many of the same liberties as sole proprietorships, you'll need to follow the country's accounting rules, including yearly financial disclosures.

13. Why choose Rivermate as your Employer of Record / PEO in Turkey

Establishing an entity in

Turkey

to hire a team takes time, money, and effort. The labor law in

Turkey

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Turkey

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Turkey

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Turkey

via our Employer of Record / PEO solution.

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