When companies expand into Turkey, one of the biggest challenges is hiring and managing employees compliantly. Turkish labor laws, tax regulations, and administrative requirements can be complex — especially for foreign businesses unfamiliar with the local system.

To simplify HR operations, many companies choose between two main outsourcing options: the Employer of Record (EOR) and the Professional Employer Organization (PEO).

Although both models help you manage payroll, benefits, and compliance, they work differently in structure and responsibility. Let’s explore how each system operates — and which one suits your business best.

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What Is an EOR in Turkey?

An Employer of Record (EOR) is a third-party company that legally employs staff on your behalf. In Turkey, the EOR becomes the official employer of your local workers while you retain full control over their day-to-day activities.

How the EOR system works

Here’s what happens step-by-step:

1. You select your candidates — your company chooses who to hire.
2. The EOR hires them locally — the EOR signs the employment contract under its own legal entity in Turkey.
3. Compliance and payroll handled — the EOR manages all employment-related tasks such as registering employees with Turkish social security, paying salaries, deducting income taxes, and ensuring full labor law compliance.
4. You manage daily operations — you direct the employee’s tasks, performance, and work schedule, while the EOR handles HR administration behind the scenes.

Example

Imagine a UK-based software company wants to hire two developers in Istanbul but doesn’t want to create a Turkish subsidiary yet.
By partnering with an EOR in Turkey, the company can:

• Onboard both developers within days.
• Avoid registering a local legal entity.
• Stay compliant with Turkish employment regulations.

The developers legally work for the EOR but report directly to the UK company.

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What Is a PEO in Turkey?

A Professional Employer Organization (PEO) provides HR management and co-employment services to businesses that already have a registered entity in Turkey.

Unlike an EOR, a PEO does not become the legal employer. Instead, it shares employment responsibilities with your company — managing payroll, benefits, HR compliance, and administrative tasks.

How the PEO system works

Here’s what the process looks like:

1. Your company hires employees directly under your own Turkish entity.
2. The PEO manages HR functions such as payroll processing, tax filing, employee benefits, and compliance documentation.
3. Both parties share responsibility — you handle operations, leadership, and legal control, while the PEO ensures smooth HR and labor law compliance.

Example

Let’s say a U.S. manufacturing company already has a branch in Izmir.
They want to outsource HR functions to save time.
By partnering with a PEO in Turkey, the company can:

• Let the PEO handle payroll and government filings.
• Focus internal resources on production and growth.
• Maintain full legal control of employees under its Turkish entity.

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Key Differences Between EOR and PEO in Turkey

Feature	EOR	PEO
Legal Employer	Yes	No
Local Entity Needed	No	Yes
Payroll & Taxes	Fully managed by EOR	Shared between company and PEO
HR Compliance	Fully handled by EOR	Shared responsibility
Ideal For	Companies without a Turkish entity	Companies already established in Turkey

In short, EOR services in Turkey are perfect for quick and compliant market entry, while PEO services enhance HR efficiency for companies that already have a local structure.

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Choosing the Right Solution for Your Business

If your company is entering Turkey for the first time, an EOR is the best way to hire employees legally without setting up a local subsidiary. You gain:

• Faster onboarding (often within days)
• Full compliance with Turkish employment laws
• Lower setup and operational costs
• Flexibility to scale up or down easily

If you already have a local entity, a PEO is a smart choice to streamline HR operations, reduce administrative work, and ensure compliance while maintaining control over your employees.