Payroll in Turkey runs through the SGK, the Social Security Institution, which administers the country's social insurance and general health insurance in one system: employment registration and termination, premium collection, pensions and health coverage all sit under its roof, fronted by e-services for employers. The mechanics are orderly, but two features make Turkish payroll unlike Western European equivalents: contribution bases and thresholds are reset frequently because of inflation, and a layer of premium incentives means the employer's effective rate depends on qualifying conditions, not just the headline. An employer of record absorbs this churn for companies without a Turkish entity; what follows is what it is absorbing.
SGK registration and the employer's cycle
A Turkish employer registers itself and each employee with the SGK, reporting hires before work begins and terminations as they happen, then declares wages and pays premiums monthly through the institution's electronic systems. The SGK side sits alongside income tax withholding to the tax administration, and both key off the declared wage, so declaration hygiene is the compliance core: under-declared wages are a classic audit finding, and the employer carries the liability. The institution's e-services handle registration, declarations and debt queries for employers, and its general health insurance arm ties premium compliance to employees' access to care, which is one reason Turkish employees pay close attention to whether their premiums are being reported correctly and on time.
The rates and bases that price a Turkish hire
Per PwC's Turkey tax summary, social security premiums for Turkish nationals total 20.75% of the premium base on the employer side, with reductions available under qualifying conditions, and 14% on the employee side, withheld from pay. Unemployment insurance adds a further layer on the same earnings: 2% from the employer, 1% from the employee and 1% from the state. Premiums are assessed on a monthly base with a floor and a ceiling, running from TRY 33,030 to TRY 297,270 at the start of 2026, so contributions stop accruing above the ceiling. Two softeners matter in practice: the employee's premium share is deductible in computing taxable income, and foreign nationals who remain covered by their home country's system can be exempt for a period, longer where a social security treaty applies. A quote for a Turkish hire should show which rates and reliefs it assumes.
Inflation mechanics: why Turkish payroll numbers move
The floor and ceiling of the premium base track the statutory minimum wage, and Turkey's inflation experience means these figures are revised far more often than Western payroll teams expect, with knock-on effects across everything indexed to them. Salaries themselves are commonly revisited more than once a year, and some employers denominate offers with reference to hard currency to manage expectations, while paying in lira as the law and practice require. For a foreign employer this is the strongest practical argument for running Turkey through an EOR or a seasoned local payroll partner: the calculation is not hard on any given month, but the parameters underneath it shift on Turkish administrative calendars, and a payroll run using last period's figures is wrong in a way employees notice immediately.
EOR versus entity in Turkey
Standing up a Turkish company, registering with the SGK and the tax administration and hiring locally is well-trodden ground, and for substantial operations it is the right structure. For a company adding a few Turkish engineers or a country manager, an employer of record starts them in days on a compliant local contract, carries the SGK and tax filings, and tracks the parameter changes as routine. The crossover is the usual fee-versus-fixed-cost calculation, with one Turkish addition: severance obligations accrue with service under local rules, so an exit has a real price whichever structure employs the person, and a provider should be able to state how severance accrual is handled and funded before the first contract is signed. Contract documents control, and nothing here is legal or tax advice.
Questions people ask about turkey payroll
What is the SGK?
Turkey's Social Security Institution, administering social insurance and general health insurance: employer and employee registration, premium collection, pensions and health coverage, with electronic services employers use for declarations and payments.
What are the social security rates in Turkey?
Per PwC's summary: 20.75% of the premium base from the employer, with reductions available under qualifying conditions, and 14% from the employee, plus unemployment insurance at 2% employer, 1% employee and 1% state, assessed between a monthly floor and ceiling.
Are contributions capped in Turkey?
Yes. Premiums are assessed on a monthly base between TRY 33,030 and TRY 297,270 as of the start of 2026, figures that are revised as the minimum wage moves.
Do foreign employees in Turkey always join the SGK?
Not immediately in every case: those who document continued coverage in their home country can be exempt for a period, longer where a bilateral social security treaty applies. The default for local hires is full SGK coverage from day one.