Turkey is a part of both Europe and Asia and benefits from significant trading advantages due to the EU Customs Union. Thus, a rising number of enterprises are targeting PEO vs EOR Turkey. Although Turks are renowned for their professionalism, establishing a business and employing employees in Turkey can be costly and time-consuming.
Turkey’s economy is varied and heavily reliant on the service and manufacturing sectors. Automobile production generates a billion-dollar export business, and Turkey is also a prominent exporter of gold, jewelry, and trucks. Tourism continues to be the primary driver of the economy.
EOR Turkey offers an excellent platform for your business to develop, having signed over 20 free trade agreements and being a member of the Customs Union and the G-20.
Employment in EOR Turkey
Work permits and visas for foreign workers involve cooperation between the employer, the Ministry of Labor, and the foreign worker’s embassy and can take up to three months to complete. In Turkey, professional services such as architecture and engineering are more strictly controlled, and clearance might take up to a year.
In Turkey, employment is primarily governed by Turkish Labor Law No. 4857. This body of legislation regulates all facets of employment, including employment contracts, work schedule, paid leave off, military duty, and termination. Negotiating Collective Bargaining Agreements and collaborating with Trade Unions are commonplace in Turkey, and potential companies should incorporate this into their hiring timelines.
Turkey’s Employment Contracts
It is legally obligatory for contracts with an indefinite duration to have a formal employment contract in the local language in place. The contract should include the employee’s remuneration schedule, perks, and termination provisions. The contract should specify the employee’s remuneration in Turkish Lira.
Working Hours
Work hours should not exceed 45 per week and should be evenly distributed among the days working. There is no such thing as a “standard” work week in Turkey.
Employees who work more than 45 hours per week are entitled to overtime pay. This includes a 50% increase in the employee’s usual hourly rate. Employees may be offered 1.5 hours of free time instead of compensation for each overtime hour worked. Increases in overtime pay may be authorized through a collective bargaining agreement or an employment contract. The total overtime hours worked per year cannot exceed 270 hours.
Holiday
Turkey requires eight paid holidays:
- New Year’s Day
- Labor Day and Solidarity Day
- National Sovereignty and Children’s Day
- Ramadan (Religious Holiday for 3.5 days)
- Commemoration of Ataturk, Youth and Sports Day
- Sacrifice Feast (Religious Holiday for 4.5 days)
- Victory Day
- Republic Day
Days of Vacation
Employees, who have worked for at least one year, including the probationary period, are eligible for paid yearly leave. Paid time off is prorated according to years of service:
- Years 1-5: 4 calendar days
- More than 5 years but less than 15 years: 20 working days
- 15 years or more: 26 calendar days
Sick Leave
Employers are not required to give sick leave, but employees are eligible for sick leave through government disability programs. In practice, the majority of businesses continue to pay employees their total compensation while they are ill and withhold the Social Security Institution’s contribution from the employee’s salary.
Maternity/Paternity Leave
Pregnant women are entitled to eight weeks of maternity leave before and after childbirth. Additionally, they are entitled to lump-sum compensation for pregnancy, childbirth, and nursing.
By law, maternity leave is 16 weeks and paternity leave is 5 days.
Health Insurance
Turkey’s healthcare system is a hybrid of mandatory health insurance and private medical insurance. The Ministry of Health is responsible for managing all health and social welfare initiatives, and all individuals are entitled to social security under the Turkish Constitution. The public healthcare system is financed through public health insurance, which is deducted automatically from employee wages.
Supplemental Benefits of EOR Turkey
Certain employers offer food vouchers or cash allowances and company automobiles and/or private health insurance.
Bonuses
In EOR Turkey, bonuses are not mandatory; however, some companies offer quarterly, biannual, and/or annual bonuses.
Termination/severance
Turkish labor law allows an employer to terminate an employee’s employment without punishment after a maximum two-month probation period.
When presenting an offer to an employee, keep termination in mind. Severance payments for termination can be substantial, mainly if they are not considered in the overall budget.
Termination of an employment contract requires written notification in advance. Employers may, however, terminate employment for cause in certain circumstances. In the absence of justification, employers are required to adhere to necessary notice periods. It varies according to the length of the employment. The following are the minimum legal periods:
- If you have been employed for less than six months, you must give two weeks’ notice.
- Between six and eighteen months of employment, four weeks’ notice is required.
- Between 18 and three years of employment, six weeks’ notice is required.
- Employed for more than three years: eight weeks’ notice
- Employers have the option of providing severance in place of notice.
Severance payments are necessary regardless of the reason for terminating an employment contract. To qualify for severance, the employee must have worked for the company for at least one year.
The severance payment is computed by multiplying the employee’s gross wage for the last 30 days by the employee’s years of service. Severance payments cannot exceed the maximum allowed by local employment authorities. Employers are also required to compensate employees for unused annual leave, unpaid overtime, and other perks.
Employees who believe they have been unfairly discharged may file a grievance with a labor tribunal. Employment contracts may always be canceled without penalty if the employer and employee agree.
Paying Taxes in PEO vs EOR Turkey
Employers and employees are obligated to contribute social security premiums. Employers must pay for both their half of the contribution as well as that of the employee’s, which is normally deducted from the employee’s paycheck.
- Social security payments rates are 14 percent paid by the employee and between 15.5 percent or 20.5 percent paid by the employer (depending on certain conditions) (dependent on certain conditions).
- Unemployment insurance contribution rates are 1 percent paid by the employee, 2 percent paid by the employer, and 1 percent paid by the state.
Conclusion
A branch office or subsidiary in EOR Turkey for the sole purpose of hiring a small workforce is time-consuming, expensive, and hard to set up. The Turkish labor law provides robust worker rights, but it necessitates meticulous attention to detail as well as a thorough awareness of local best practices. Acvian makes the process of expanding into Turkey uncomplicated and straightforward. We can assist you in hiring your preferred candidate, managing human resources and payroll (see our payroll cost calculator), and ensuring that your company is following local legislation, all without the expense of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record (PEO vs EOR Turkey) solution give you the peace of mind you need so that you can concentrate on running your organization.
