What do we need to know about payroll in Türkiye ?

Türkiye has a progressive income tax system. The tax rates vary depending on an individual’s income. Employers are responsible for withholding and remitting income tax from employees’ salaries.

Employees in Türkiye are required to make social security contributions. These contributions cover benefits such as health insurance, retirement, and unemployment. Both employers and employees make contributions to the social security system.

Türkiye sets a minimum wage, which is updated annually. Employers are required to pay their employees at least the minimum wage rate, which may vary based on the region within Türkiye.

In addition to income tax and social security contributions, employers may be required to make other deductions from employees’ salaries, such as union dues or other authorized deductions.

Employers often provide various bonuses and allowances to employees, including annual bonuses, holiday bonuses, and transportation allowances. These can be subject to specific tax rules.

The standard payroll period in Türkiye is monthly, with employees receiving their salaries on a monthly basis.

Türkiye has comprehensive labor laws that govern employment contracts, working hours, overtime, and termination procedures. Employers must comply with these laws when calculating and disbursing salaries.

Employees are entitled to annual paid leave, the duration of which depends on their length of service. Türkiye also observes several national and religious holidays during which businesses are typically closed, and employees may be entitled to holiday pay.

Many businesses in Türkiye use payroll software to calculate and manage employee salaries, taxes, and social security contributions accurately. These software solutions are often designed to comply with Turkish tax regulations.

Employers are required to submit regular reports to government authorities regarding payroll, social security contributions, and taxes withheld. Ensuring compliance with reporting requirements is crucial to avoid penalties.

If you employ foreign nationals in Türkiye, there may be additional requirements and regulations related to work permits and taxation.

When an employment contract is terminated, there are specific rules regarding severance pay, notice periods, and final payments that employers must follow.

Maintaining accurate payroll records and documentation is essential for compliance and auditing purposes. Employers should keep records of salary payments, tax withholdings, and social security contributions.

Failure to comply with payroll regulations in Türkiye can result in penalties and legal issues. It’s crucial to stay updated with changing regulations and ensure accurate payroll management.

Many businesses in Türkiye seek the assistance of experienced accountants or payroll service providers to ensure compliance with payroll regulations and tax laws.