Everything You Need to Learn About Payroll in Turkey
Turkey may not be the first country that comes to mind when you think about expanding a business, but it’s definitely one of the best places to do it.
Aside from its GDP of $858 billion, the country spanning Europe and Asia also has one of the most diverse economies anywhere in the world, and its market has been growing steadily over the last few years.
Expanding your business in Turkey is not as difficult, but you have to be familiar with the basics, one of which is payroll in Turkey.
How to get started
The first step to registering your business in Turkey is to visit the MERSIS website, which is the central registration system for businesses in the country. Here, you’ll need to submit fully notarised articles of association and memorandum for approval. It’s also where you can start processing your tax identification number.
To start a business in Turkey as a foreigner, you have to deposit part of your capital at Halk Bankasi, a state-owned bank and another 25% in another Turkish bank. After you’ve acquired all the business registration documents, you can easily set up an account at one of the banks, register at the Commercial Registry and finalise tax information at the Tax Office.
To get started with your payroll in Turkey, you need to learn about the basics in employee compensation first. As of July 2019, the country’s monthly minimum wage is at 422.26 EUR, but this rate increases with the level of skill and expertise that the employee has.
Employers generally determine their pay cycles and payslips are given out in electronic statements. Aside from compensation, employees also need to be given rest breaks depending on their working hours.
If an employee is due to be terminated for downsizing reasons, they need to be notified properly and given the right compensation in the form of a severance fee. This payment is given to employees with at least one year of service to the company and is calculated by multiplying the employee’s monthly salary by the number of years in service.
Turkey’s tax rates are constantly evolving, especially with the consistent public demand for better wages. Generally, the country’s corporate tax is 20% with an additional withholding tax of 15% for when dividends are paid to shareholders.
For employees, a 15% contribution should be made to social security while the employer puts in 21.5% to social programs. Locals in Turkey are taxed according their total income while foreigners are taxed only based on their income in the country.
Why hire payroll professionals in Turkey
Payroll in Turkey is just like any country in the world: it takes a lot of time and hard work to manage it.
So if you’re expanding your business in the country, it would be a smart choice to outsource your requirements to a reliable third-party provider who knows taxation, compensation and other employment basics in Turkey. This way, you won’t have to learn the ropes yourself and just focus on establishing your business in the country. Azkan Group