Introduction
Expanding into Turkey offers exciting opportunities, but it also brings complex legal and compliance challenges. Turkish employment law requires strict adherence to local labor regulations, tax filings, and social security contributions.
For international companies without a local entity, navigating these requirements can be overwhelming. That’s where EOR companies in Turkey (Employer of Record providers) come in. They act as your trusted local partner, enabling you to hire employees legally and manage all HR obligations — without setting up a Turkish subsidiary.
But what exactly does “legal and compliance coverage” mean under an EOR model? And do EORs truly act as the legal employer? Let’s break it down.
Are EOR Companies the Legal Employer in Turkey?
Yes – under Turkish law, an Employer of Record (EOR) is recognized as the legal employer of record for the employees they hire on behalf of a foreign company.
This means:
- The EOR signs the employment contract with the worker under its own Turkish legal entity.
- The EOR registers the employee with the Social Security Institution (SGK).
- The EOR withholds and pays taxes to Turkish authorities.
- The EOR ensures full compliance with the Turkish Labor Code, occupational safety laws, and other relevant regulations.
Meanwhile, your company retains operational control over the employee — managing day-to-day work, performance, and business goals — while the EOR handles the legal and administrative side.
Example
A U.S.-based fintech company wants to hire a sales manager in Istanbul.
Instead of setting up a Turkish subsidiary, they partner with an EOR.
The EOR signs the employment contract, handles payroll and tax filings, and ensures full compliance — while the U.S. company manages the employee’s targets, projects, and incentives.
In this arrangement, the EOR is the legal employer, but the client company is the functional or operational employer.
What Legal and Compliance Areas Do EORs Cover?
EOR companies in Turkey provide end-to-end legal and HR compliance coverage, ensuring your workforce operates 100% within Turkish regulations.
Here’s what’s included:
1. Employment Contracts
- Drafted according to Turkish Labor Law No. 4857.
- Include legally required terms such as working hours, wages, leave, and termination rights.
- Offered in Turkish (and often English) to ensure mutual understanding.
The EOR ensures that every contract meets local legal standards — protecting both the employer and employee.
2. Payroll & Income Tax Compliance
- Monthly payroll processing in compliance with Turkish labor and tax regulations.
- Calculation and deduction of income tax (Gelir Vergisi) and stamp tax (Damga Vergisi).
- Accurate and timely submission of payroll reports to Turkish authorities.
This eliminates the risk of penalties or fines for incorrect filings.
3. Social Security & Health Insurance (SGK)
- Registration of employees with the Turkish Social Security Institution (SGK).
- Payment of employer and employee contributions for pension, health insurance, and unemployment.
- Compliance with all mandatory occupational health and safety regulations.
This ensures your employees are fully covered under the Turkish public system and your company remains compliant with labor laws.
4. Employee Benefits Administration
While Turkey has mandatory social benefits, EORs can also manage additional employee perks, such as:
- Private health insurance
- Meal allowances or food cards
- Transport stipends
- Bonus and incentive plans
EOR companies often tailor benefit packages to meet local market standards, helping you stay competitive when hiring talent in Turkey.
5. Labor Law Compliance & Terminations
The Turkish Labor Code has detailed rules on working hours, overtime, leave entitlements, and termination.
An EOR ensures that all employment actions — including disciplinary measures or contract termination — are carried out in accordance with the law.
This reduces your exposure to legal disputes or wrongful dismissal claims.
The Full Spectrum of Coverage
| Compliance Area | Handled by EOR? | Description |
|---|---|---|
| Employment Contracts | ✅ Yes | Drafted under Turkish law and signed by EOR |
| Payroll Management | ✅ Yes | Monthly salary processing, payslips, and reports |
| Income Tax | ✅ Yes | Calculated, withheld, and paid by EOR |
| Social Security (SGK) | ✅ Yes | Employer and employee contributions managed |
| Benefits | ✅ Yes | Mandatory and optional employee benefits |
| Work Permits | ✅ Yes | Assistance with foreign employee work authorization |
| Termination & Severance | ✅ Yes | Managed according to Turkish labor law |
Why Compliance Matters in Turkey
Turkey enforces strict penalties for non-compliance in payroll, social security, and employment matters.
Mistakes in registration or late tax payments can result in fines, audits, or reputational damage.
By using an EOR company in Turkey, you transfer those compliance risks to a local legal expert who ensures that every employment relationship follows national laws and regulations.
EOR companies in Turkey are more than just HR service providers — they are the true legal employers of your local staff.
They cover the full spectrum of compliance, including employment contracts, payroll, tax, social security, benefits, and labor law management.
If your business wants to hire in Turkey quickly, legally, and without setting up a local entity, partnering with a reputable Employer of Record is the safest and most efficient choice.
