Hiring employees in Turkey has never been a simple matter, and in 2025, the process has only grown more intricate. With rising wages, heavy social contributions, and a tax system in constant flux, companies must tread carefully. Whether you’re hiring directly or through an employer of record, today’s payroll in Turkey is not for the faint of heart.
Payroll in Turkey explained: 2025 wages, taxes, and employer costs
The minimum wage, reimagined
As of January 2025, the Turkish government increased the minimum wage by roughly 30% – a move aimed squarely at combating the elevated cost of living.
- Gross salary: TRY 26,005.50
- Net pay: TRY 22,104.67
- Total employer cost: TRY 31,920.75
A typical payroll at this level breaks down as follows:
| Item | Amount (TRY) |
|---|---|
| Employee Contributions (SGK + UI) | 3,900.83 |
| Employer Contributions (SGK + UI) | 5,915.25 |
| Take-home Pay | 22,104.67 |
| Total Outlay by Employer | 31,920.75 |
Minimum wage earners are shielded from income and stamp taxes. But while this policy offers short-term relief to employees, it leaves employers holding the bag. Many businesses, especially smaller outfits, have taken to restructuring compensation with allowances and benefits to stay afloat.
Payroll in Turkey: what it really takes
Processing payroll in Turkey involves a fixed sequence of steps, but there’s little room for error. Missteps often lead to stiff penalties or worse.
- Calculate gross salary – Base pay, bonuses, and all allowances.
- Deduct statutory contributions – Employee shares of SGK, income tax, and stamp tax.
- Determine net salary – The sum that lands in the employee’s pocket.
- Add employer costs – SGK and unemployment insurance on the employer’s dime.
- Submit declarations – Reports due by the 26th of the following month.
In short, every payroll run is a government filing. And when taxes, inflation, and SGK thresholds move as often as they do in Turkey, you’d better keep your pencils sharp.
Social security: the lion’s share
The lion’s share of payroll obligations in Turkey stems from social security, known locally as SGK. It covers everything from health insurance to old-age pensions and unemployment support.
- Employee Share: 15%
- Employer Share: 22.5% (reduced to 15.75% with applicable incentives)
For a gross salary of TRY 26,005.50, the employer owes nearly TRY 5,915.25, while the employee’s cut stands at TRY 3,900.83. Employers often say that in Turkey, you pay your workers twice – once to them, and once to the state.
And the government is taking enforcement more seriously than ever. Companies relying on freelancers or remote hires have found themselves under the magnifying glass. Misclassify a worker and you may end up in hot water.
The taxman cometh
Turkey’s income tax is progressive in theory, but unpredictable in practice. The brackets are updated regularly and without much notice.
| Income Bracket (TRY) | Rate |
|---|---|
| Up to 158,000 | 15% |
| 158,001 – 330,000 | 20% |
| 330,001 – 1,200,000 | 27% |
| 1,200,001 – 4,300,000 | 35% |
| Above 4,300,000 | 40% |
For a gross income of TRY 400,000, a worker would pay 15% on the first slice, 20% on the next, and 27% on the remainder.
Yet despite these high marginal rates, employees are still feeling the pinch. With inflation running high, net pay has lost ground. Many professionals, particularly in technology and finance, are heading for the exits, looking to Europe and the Gulf for steadier pay and a stronger currency.
The stamp tax: a footnote that adds up
The stamp tax may not grab headlines, but it shows up on every payslip.
- Rate: 0.759% of gross salary
- Exemption: Minimum wage earners
On a TRY 30,000 salary, that amounts to TRY 227.70. Small, yes – but over time and across a workforce, it becomes a cost worth watching.
Tax-free allowances: a loophole worth knowing
To ease the burden, the government permits several allowances to be paid without tax – provided they don’t exceed set thresholds.
| Allowance Type | Limit (TRY) |
|---|---|
| Child | 506.28/month per child |
| Spouse | 2,600.55/month |
| Meal (Card) | 264/day |
| Meal (Cash) | 240/day |
| Transport | 126/day |
Most employers now lean on these allowances to keep gross wages steady while offering something meaningful. Digital meal cards, in particular, have caught on. They’re tax-efficient, easy to manage, and harder to fudge.
Labor law in Turkey: a tightrope for employers
Turkey’s Labor Code is clear on paper but complex in practice.
- Workweek limit: 45 hours
- Overtime rates: 150% on weekdays, 200% on weekends
- Severance pay: 30 days’ gross salary per year served
- 2025 severance cap: TRY 46,655.30
- 2025 SGK cap: TRY 195,041.00
To sidestep overtime obligations, some firms now offer project-based bonuses or adopt flexible scheduling. But those cutting corners too sharply often find themselves back in court.
The currency trap: what employers don’t see coming
Turkey’s official inflation rate hit 47.09% by late 2024. The 2025 minimum wage hike may have plugged the gap temporarily, but the deeper problem remains: a lira that just won’t sit still.
To hedge their bets, some companies now denominate senior salaries in foreign currency, usually USD or EUR. Others turn to dual-currency contracts or forward agreements to protect against monthly payroll swings.
Meanwhile, many Turkish professionals working remotely for foreign firms now demand payment in hard currency. This opens a can of worms – tax residency, SGK liability, and cross-border compliance. But for workers who’ve had their savings gutted by inflation, it’s a risk worth taking.
How Turkey stacks up
Compared to its neighbors, payroll in Turkey costs land somewhere in the middle. Social security is less punishing than in France or Germany, but heavier than in Eastern Europe. Yet the volatility of the currency and tax rules levels the field differently.
In short, the rules may look manageable on paper, but on the ground, it’s another story.
Running payroll in Turkey today requires more than good intentions…
Between the taxes, the filings, the compliance issues, and the shifting legal landscape, it’s easy to get tripped up. And in this environment, those who try to cut corners often pay double in the end.
There was a time when you could manage payroll with a spreadsheet and a calculator. That time is gone. In 2025, keeping your house in order means knowing the law, watching the markets, and partnering with folks who’ve been through it before. Because when it comes to payroll in Turkey, what you don’t know can hurt you – and fast.
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