How is payroll prepared in Turkey?

Turkish payroll (bordro) runs on a fixed monthly cycle: collect attendance and absence data, determine gross pay, deduct the employee's social security (14%) and unemployment (1%) premiums, compute income tax on the year-to-date cumulative base, subtract the minimum-wage exemption, apply 0.759% stamp duty, and pay out the net. The employer then reports withheld taxes and social premiums together in one monthly filing, the Muhtasar ve Prim Hizmet Beyannamesi.

Gross pay in 2026 cannot fall below the statutory minimum wage of TRY 33,030 per month, fixed for the whole of 2026 with no mid-year revision. Overtime is paid at 150% of the normal hourly rate (Labor Law No. 4857, art. 41) and enters gross pay alongside bonuses and cash allowances.

Social security premiums are calculated on a capped base: the floor equals the minimum wage (TRY 33,030) and the 2026 ceiling is TRY 297,270 per month, nine times the minimum wage, raised from 7.5x by Law No. 7566. On this base the employee pays 14% social security plus 1% unemployment insurance (Law No. 5510, art. 81 and Law No. 4447). Earnings above the ceiling carry no premium.

Income tax is withheld by the employer on a cumulative year-to-date base (gross minus employee premiums). The 2026 wage tariff runs 15% up to TRY 190,000, 20% to 400,000, 27% to 1,500,000, 35% to 5,300,000, and 40% above (Income Tax General Communiqué No. 332). An employee's withholding therefore rises through the year, so a January payslip and a November payslip differ at constant salary, which regularly surprises employers used to flat monthly withholding.

Since 2022, the portion of every salary equal to the minimum wage is exempt from both income tax and stamp duty (Law No. 7349, which abolished and replaced the former AGİ tax credit). The exemption applies to all employees regardless of pay level. Stamp duty is 0.759% of gross above the exempt portion. Net minimum wage is exactly gross × 0.85 = TRY 28,075.50, because only the 15% of premiums is deducted.

Employer costs come on top of gross: 21.75% employer social security (the pension share rose one point in 2026 under Law No. 7566) plus 2% employer unemployment insurance. Compliant private employers receive a 2-point Treasury discount, with manufacturing keeping 5 points through 31 December 2026, so the standard effective burden is 19.75% + 2%. A minimum-wage employee costs TRY 40,214.03 per month (33,030 × 1.2175), before separate employer incentives.

Labor Law art. 37 obliges the employer to hand each employee a wage slip, signed or carrying the workplace's mark, showing the payment date and period, every addition to base pay (overtime, weekly rest, national and public holiday pay) and every deduction (tax, social premiums, advance offsets, alimony, garnishments) as separate line items. Social security rules add identity and period fields: a payroll register missing them is deemed invalid (Law No. 5510, art. 102).

Payroll records must be kept for ten years under social security law (Law No. 5510, art. 86), and tax law requires five (Tax Procedure Law art. 253). For a foreign employer the practical takeaways: payslips are mandatory and itemized, withholding is cumulative, and taxes plus premiums are declared monthly through one combined filing.

Turkish law does not prescribe a tool: a spreadsheet payroll that carries the art. 37 content is valid, and at five to ten employees a careful template works. The risk scales with headcount: cumulative tax bases tracked per person, statutory parameters that change every January, pro-rata calculations for mid-month starters and leavers. Most foreign employers hand payroll to a local provider or use payroll software. Otto HR prepares the bordro with current statutory parameters, and a person reviews and approves it.