Professional Employer Organization (PEO) in Turkey

What is a PEO?

A professional employer organization (PEO) helps shoulder the burden of international hiring. PEOs manage payroll, employer contributions, employee benefits, and other HR requirements. 

Most importantly, a PEO ensures your organization is compliant with local employment regulations, saving you from potential fines and punishments. International payroll, tax law, and employment laws in Turkey get very tricky, very quickly! A PEO will make sure that everything you’re doing is above board. 

Partnering with a PEO is a smart move for SMEs in particular. With a PEO, there’s no need to hire external legal counsel or local HR experts when hiring in Turkey. 

You can build a team of global employees without having to incorporate new companies and the PEO will take on the time-consuming burden of payroll and other important HR functions. This leaves you free to continue recruiting the top talent and growing your organization. 

Sounds like something your growing startup or business needs? Then get in touch with Skuad today. 

What are the benefits of using a PEO provider in Turkey?

Partnering with a PEO provider will open a lot of doors for your organization. From legal compliance to a more diverse team, let’s go through some of the biggest benefits of using a PEO to build a team in Turkey. 

Hire the best talent

How many times have you been blocked from recruiting the best talent for an open position, just because of where the candidate is based? Or perhaps, you’ve never even had the opportunity to hire outside the city or country where your organization is headquartered. 

With a PEO, you don’t need to be limited by location. You have the opportunity to hire the absolute best talent, around the world, no matter where the candidate is living. 

Turkey has seen a recent boost in the tech and electronics industry and is steadily moving up the World Bank’s Ease of Doing Business Report –– a helpful barometer for organizations deciding where to expand.  

Using a PEO means you can tap into this pool of talented workers who would love the opportunity to work for an international company like yours. 

Become a global competitor 

As an employer, you want to give your workers the best compensation possible. Not only is it important to recognize your team’s work, but it’s also going to help encourage the best candidates to want to work with you. 

It’s hard to know exactly what salary and benefits should be offered to an employee or contractor living in Turkey. Thankfully, the PEO you partner with will be totally across it. They’ll make sure you’re meeting statutory benefit requirements –– and going the extra mile to bring in and retain business-changing talent. 

Save on unnecessary costs

Without a PEO, hiring employees in Turkey would incur massive costs for your organization. In fact, it would only really be a path worth following if you were planning to build out a big team based there. 

You’d need in-house HR that’s briefed on Turkish workplace customs, and a legal team to ensure you’re complying with local employment regulations when doing business in Turkey. Then you’d also need the manhours to complete the hiring and onboarding process. Basically, it’s more cost-effective — and a lot simpler — to go with a PEO. 

Gain valuable insights into a new global market

Turkey is the world’s 11th largest economy. As a small business, that should be making your ears perk up. And if you want to find a way into this market, hiring employees within the region is a fantastic way to hit the ground running. 

Not only will they be able to provide first-hand market insights, but you’ll then also be better poised to expand into the surrounding European market as well. 

Keen to onboard some valuable assets into your company ASAP? With Skuad you can get started for free, and begin growing your business today. Get in touch for a demo.

Avoid setting up your own legal entity in Turkey

If a company wanted to hire Turkish residents on its own, without the help of a PEO, they’d need to incorporate a legal entity in-country. This is no easy feat! It can take months of work, a team of lawyers, and a lot of specialized knowledge in the employment laws of Turkey. 

There could also be unforeseen costs, like flying to and from Turkey to manage things on the ground and establish a local business address. 

Partnering with a PEO abolishes the need to set up your own legal entity –– Skuad has a company already established in Turkey through which you can hire workers. 

Become culturally aware

When building and managing a global team, it can be tricky to understand the wide variety of cultural differences that may impact business on a daily basis. As your partner organization, a PEO will be across the various cultural practices that come up, keeping you informed and on top of everything. 

Each year, Turkish workers get a paid half-day off for Ramadan Eve and two paid days off for the Ramadan feast. Muslim employees will likely be fasting for the month of Ramadan — something to keep in mind as an employer. 

Ensure that your business complies with statutory requirements in Turkey

Every country around the world has its own employee and payroll regulations –– it’s impossible to know the ins and outs of it all, especially if your team is spread out around the world. 

If you don’t comply with these laws, however, you could face hefty fines or even business bans. That’s why it’s so important to protect your company by partnering with a PEO. They will ensure that everything you do is legally compliant, from paid leave to social security contributions.

Here are the basics that you’ll need to know when hiring in Turkey:

Payroll

• Employees are paid in Turkish lira (TRY).
• The minimum wage is fixed at 2,825 Turkish liras (approx US $200) per month.
• For termination, notice periods are determined by the tenure of the employee, starting at two weeks and capping at eight weeks.
• Probation periods must be supplied in writing, and are generally two months. They can be extended to four months provided both parties agree. 

Leave

Employees are entitled to paid time off based on their tenure with the company:

• 1 – 5 years: 14 days
• 6 – 14 years: 20 days
• 15+ years: 26 days

• Employees aged 50 and above are automatically entitled to 20 days off annually.
• In Turkey, there are 14 public holidays observed annually, for which employees are paid but do not work. 
• Employees are entitled to receive sickness benefits after the third day of being sick. This is paid by the social security office. 
• Female employees are entitled to 16 weeks of maternity leave.
• Employees can take up to three days off to get married. 

Turkey tax rates and payroll contributions

Employees are automatically taxed on their income in Turkey:

• 15% - 0 – 32,000 TRY
• 20% - 32,000 - 70,000 TRY
• 27% - 70,000 – 250,000 TRY
• 35% - 250,000 – 880,000 TRY
• 40% - 880,000+ TRY

On top of this, employees must contribute

• 9% for Pension & disability
• 5% for General Health Insurance
• 1% for Unemployment Insurance

Employers must pay contributions too, including:

• 2% for Short Term Insurance Branch Premium
• 11% for Insurance & disability
• 7.5% for General Health Insurance
• 2% for Unemployment Insurance

Is your head swimming with all these numbers? Learn more about how Skuad’s PEO services can take the stress out of doing business in Turkey, and around the world, by booking a demo today.

What does it cost to build a team in Turkey?

Company incorporation in Turkey

To employ in Turkey, companies must own a local legal entity in the country. This isn’t as simple as filling out a form and paying a fee. To register a business in Turkey, one must:

• Register a company name
• Contract a local lawyer with power of attorney in 
• Register as a business to legally do trade
• Apply with the tax office and register with social security
• Open a bank account for the company –– but one which doesn’t need Turkish residence papers.

Registration only costs about $1000 USD, but the costs required to get everything else sorted will quickly add up. Banking fees, legal costs, translators, office rental…the list goes on.

Or, you could just partner with a PEO.

PEO in Turkey

Prices for a PEO service in Turkey vary between providers and the service they give. Skuad will get you started for free –– and you can cancel at any time without termination fees. 

Our PEO services allow you to onboard and pay employees in Turkey (and elsewhere around the world) starting at just $19 per month. A pretty reasonable cost of doing business, if we do say so ourselves!

Want to book in for a demo?

If you’re ready to start onboarding and paying employees in Turkey, book in for a demo of Skuad’s global PEO solution right away.