The Real Cost of Hiring an Employee in Turkey: What Businesses Need to Know
Hiring in Turkey comes with many opportunities—but also a number of financial responsibilities that can quickly add up if you’re not prepared. Whether you’re a local employer scaling up your team or an international company entering the Turkish market, understanding the full scope of employee costs is key to staying compliant and financially sound.
From gross salaries to social contributions, taxes, and benefits, this guide breaks down everything you need to know about what it really costs to bring a new team member on board in Turkey.
1. What Makes Up the Total Cost of Hiring in Turkey ?
Hiring an employee in Turkey isn’t just about agreeing on a salary. The full cost includes:
- Gross monthly salary
- Social security contributions
- Payroll taxes
- Legal requirements (e.g., severance pay, notice periods)
- Employee benefits and allowances
- Recruitment and onboarding expenses
These direct and indirect costs impact your budget, so it’s crucial to factor them in early when planning your workforce strategy.
2. Salary Basics: Minimum Wage and Gross Pay
As of 2024, Turkey’s gross minimum wage stands at 17,002.12 TRY per month. However, most employees earn above the minimum, depending on their skills, industry, and experience level.
Employers also need to consider additional pay items like:
- Overtime compensation
- Annual bonuses
- Holiday pay
- Allowances (e.g., transportation or meals)
All of these can significantly increase the overall payroll cost.
3. Social Security Contributions (SGK)
Employers in Turkey are required to register all employees with the Social Security Institution (SGK) and contribute toward several programs, including health coverage, pensions, and unemployment insurance.
The contributions are split between the employer and employee:
- Employer’s share: 22.5% of the gross salary
- Employee’s share: 15% (withheld from the employee’s salary)
Example: For an employee earning 17,002.12 TRY per month, the employer’s SGK contribution is roughly 3,825 TRY monthly.
4. Income Tax and Other Legal Deductions
Turkey uses a progressive income tax system, which the employer is responsible for calculating and deducting from the employee’s salary. Here’s a simplified breakdown of 2024 tax brackets:
- 15% on income up to 110,000 TRY
- 20% on 110,001 – 230,000 TRY
- 27% on 230,001 – 1,900,000 TRY
- 35% on 1,900,001 – 3,900,000 TRY
- 40% on income above 3,900,000 TRY
Employers must also account for stamp tax, which is about 0.759% of the gross salary, and ensure all legal deductions are correctly applied.
5. Benefits and Allowances: Beyond the Paycheck
To stay competitive in Turkey’s job market, most companies offer benefits on top of the standard salary. These include:
- Meal stipends or Yemek Kartı (meal cards)
- Transportation support, such as bus passes or fuel reimbursement
- Private health insurance, in addition to SGK coverage
- Performance bonuses or profit-sharing schemes
- Flexible working hours or hybrid/remote work options
While not legally required, these perks can significantly boost employee satisfaction—and your total cost per hire.
6. Termination Costs and Severance Pay
If an employment relationship ends, employers must comply with Turkey’s termination laws.
- Severance pay: One month’s gross salary per year of service (after 12+ months of employment)
- Notice periods:
- 0–6 months: 2 weeks
- 6–18 months: 4 weeks
- 18–36 months: 6 weeks
- Over 3 years: 8 weeks
These costs can add up, especially when downsizing or restructuring.
7. Recruitment and Onboarding Expenses
Hiring doesn’t come free. Employers often incur additional costs such as:
- Advertising on job boards like Kariyer.net, LinkedIn, or Eleman.net
- Recruitment agency fees (if outsourcing)
- Time and resources spent screening, interviewing, and onboarding
- Training expenses, especially for technical or senior roles
- Work permit fees when hiring foreign nationals
These “soft costs” often go overlooked but can affect hiring ROI.
8. Hidden or Overlooked Costs of Hiring in Turkey
Beyond the obvious, here are a few hidden expenses to keep in mind:
- Employee turnover and replacement costs
- Compliance risks—penalties for noncompliance with labor laws or tax regulations
- Office space, equipment, and IT tools
- Occupational safety compliance (mandatory for many industries)
Factoring these in gives you a clearer picture of the true cost of employment.
9. How Turkey Compares Internationally
One of Turkey’s key advantages is relatively affordable labor costs compared to countries in Western Europe.
- Germany: Employer social contributions often exceed 30%
- UK: National Insurance is 13.8% of gross pay
- Turkey: Employer social contributions are 22.5%, making it an attractive option for international expansion
This cost-effectiveness is one reason many foreign companies are setting up operations in Turkey.
10. How to Optimize Hiring Costs in Turkey
There are smart ways to manage and reduce labor expenses without compromising talent quality:
- Leverage government incentives (e.g., subsidies for hiring youth, women, or disabled workers)
- Consider freelancers or part-time employees for non-core functions
- Adopt remote work policies to reduce office overhead
- Use in-house HR teams instead of costly external agencies
- Invest in employee retention to reduce turnover-related costs
Being strategic about how and who you hire can lead to significant long-term saving.
Hiring employees in Turkey involves more than just offering a salary. From legal obligations and social security to hidden administrative and cultural costs, the total investment per hire can be substantial. But with the right planning and understanding of local regulations, these costs can be managed efficiently—and even used to your advantage.
Whether you’re hiring your first employee or scaling a full team, taking a proactive, informed approach will help you build a strong, compliant workforce in Turkey without unnecessary financial surprises.
