The Complete Guide to Offering Employee Benefits in Turkey: Part 1

laptop screen showing the words employee benefits

By Ashutosh Agarwal, Manager, Global Benefits, GoGlobal

Turkey plays a significant role in the global economy, attracting the interest of international businesses for foreign direct investment (FDI). For example, Turkey is one of the top suppliers of chrome ore, a key input in the manufacture of stainless steel, according to the European Chemical Industry Council (Cefic).

As more supply chains link through Turkey, the country is becoming an attractive destination for global operations and hiring. However, navigating the landscape of employee benefits can be challenging for international employers. The blend of statutory requirements and supplemental benefits necessitates a deep understanding of local laws and cultural expectations.

In the first installment of this two-part blog series, we focus on the statutory benefits employers must offer in Turkey.

Statutory benefits in Turkey

The Ministry of Labor and Social Security controls and manages employment and social security affairs in Turkey. Residents benefit from the Turkish social security system by enrolling in the Turkish Social Security Fund.

Through employer and employee contributions to the fund, all Turks receive access to various free and low-cost benefits. The following are the key statutory benefits employers must provide:

  • Social Security Contributions: Employers are required to contribute to social security on behalf of their employees. This includes pension contributions, health insurance, unemployment insurance and worker’s compensation insurance.
  • Pension Contributions: An employer must contribute 11% of its payroll expense to Turkey’s public pension and disability schemes. Employees contribute 9%. The pensionable age in Turkey is currently 60 for men and 58 for women. However, this is projected to rise to 65 for both by 2036.
  • Health Insurance: All employees in Turkey are entitled to health insurance coverage, which includes medical treatments, hospitalization and prescription medications. The Social Security Institution (SGK) manages the health insurance program. Employers must contribute 7.5% of their payroll expenditure to Turkey’s general health insurance scheme. Employees contribute 5%.
  • Unemployment Insurance: Employers contribute 2% of payroll to the unemployment insurance scheme while employees contribute 1%. This fund provides financial support to employees in case of job loss.
  • Worker’s Compensation Insurance: Employers must contribute to worker’s compensation insurance. This covers medical expenses and income replacement for employees who are injured or become ill due to workplace conditions.

Other compulsory benefits in Turkey

Apart from the major state benefits, there are other benefits that employers must provide as mandated by Turkish labor laws. These include:

  • Paid Leave: Employees are entitled to various forms of paid leave:
    • Annual Leave: Employees are entitled to annual leave based on their length of service. After one year of service, employees receive 14 days of annual leave. This increases to 20 days after five years of service and 26 days after 15 years of service.
    • Sick Leave: Employees can take sick leave with a medical report. Employers are required to pay for the first two days of sick leave, with subsequent days covered by social security.
    • Maternity Leave: Female employees are entitled to 16 weeks of paid maternity leave—eight weeks before and eight weeks after childbirth. Additional unpaid leave can be requested.
    • Paternity Leave: Fathers are entitled to five days of paid paternity leave.
    • Marriage Leave: Employees can take three days of paid leave for their marriage.
    • Bereavement Leave: Employees are entitled to three days of paid leave in the event of the death of a close family member.
  • Severance Pay: In the event of termination, employees who have completed at least one year of service are entitled to severance pay. This is calculated based on their length of service and salary.
  • Minimum Wage: Turkey maintains a legally mandated minimum wage to set a basic standard of living for all employees:
    • Turkey usually reviews the minimum wage twice a year, once in January and once in July.
    • The minimum wage increased by 49% in Turkey on January 1, 2024.
    • Due to the significant increase in January, it is unlikely that there will be an additional adjustment in July.

Key takeaways and points to remember

Compliance with Turkish labor laws and efficient administration are crucial to the success of a benefits program. Here are some key takeaways and points to remember:

  • Failure to offer statutory benefits is a labor violation, resulting in fines or bans from operating in Turkey.
  • It is important to outline statutory employee benefits in employment contracts. This promotes clarity and avoids any misunderstandings.
  • Local experts and global HR platforms can help international companies navigate Turkish regulations and streamline the administration of benefits.

Up next: supplemental benefits in Turkey

In the next blog post of this two-part series on providing benefits in Turkey, we will focus on supplemental benefits. While not mandatory, they can serve as a powerful tool for attracting and retaining top talent in Turkey.

Learn more about regulations and hiring in Turkey here: Hire in Turkey | GoGlobal

Contact us today to discover how the GoGlobal Global Benefits Team can help you design benefits that fuel business expansion and hiring in Turkey.