Hiring in Turkey, due to the large, younger population, can be a lucrative action for your business growth. But things become harder when you realize that Turkish labor laws are stricter.
You not only have to register your company in Turkey but also with the tax department and the social security department, known as SGK. If you don’t register your employees with SGK, officials may impose fines and penalties.
The main cause of such fines and penalties is unawareness of SGK and its requirements. So, let’s take a deeper look at SGK and the options you can use to fully comply with this department.
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Hiring in Turkey, due to the large, younger population, can be a lucrative action for your business growth. But things become harder when you realize that Turkish labor laws are stricter.
You not only have to register your company in Turkey but also with the tax department and the social security department, known as SGK. If you don’t register your employees with SGK, officials may impose fines and penalties.
The main cause of such fines and penalties is unawareness of SGK and its requirements. So, let’s take a deeper look at SGK and the options you can use to fully comply with this department.
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Co-author
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SGK is essentially a Turkish government department, similar to other departments such as the trade register or the chamber of commerce. It was established to protect Turkish employees, and here is how:
Sosyal Güvenlik Kurumu (SGK) is a Social Security Institution in Turkey. It is the government authority that manages the social insurance of employees. SGK does not only cover health insurance; it also manages other types of insurance:
SGK is important for employers, especially foreign employers, because it is mandatory to register employees before their first working day. Note that this requirement applies to both locals and foreigners because the Turkish government treats foreigners as locals for business purposes.
Both the employer and the employee contribute to SGK, and the employer’s portion of the contribution is higher than that of the employee. These contributions are calculated based on the employees’ gross salary. If an employer does not comply with SGK rules, the following risks may arise:
SGK compliance is crucial for foreign companies as it is required for work permits and is also mandatory when hiring under an Employer of Record (EOR). Employees must submit monthly declarations. Companies may also face retroactive premium payments in cases of non-compliance. Registering with SGK validates the employment and provides workplace accident coverage.
As mentioned above, registering employees with SGK is essential before they start their first working day. This is a time-sensitive process that an employer must complete without errors.
Employees must be registered before their first working day (mandatory).
Here are the key rules for registering with SGK: you must submit the registration before the start date. Late registration can result in penalties. Make sure the start date matches official records. Monthly premium declarations follow registration.
For foreigners, it is important that work permits are approved first. This means that work permits in Turkey and SGK registration are deeply connected.
Now we will discuss the documents required for SGK registration, and after that, we’ll explain how to register with the SGK system from home. Here is the list of all documents you may need when registering with the Turkish Social Security Institution:
Accuracy is critical, salary and dates must match official records.
Once you have prepared all necessary documents, it’s time to register with the SGK system. SGK has its own online portal for this purpose. Employers use it for new employee registration, monthly declarations, salary reporting, and finally, payment tracking.
To access this portal, you need authorized employer credentials. If you are using EOR, payroll, or accounting management services, their credentials are required. As the process is complex and time-consuming, foreigners mostly use EOR or accounting management services.
SGK contributions are not annual; they are monthly mandatory payments. You have learned that both the employer and employee submit them and calculate them based on gross salary. The key point that an employer must know is that these SGK premiums increase the total employment cost.
When an employee pays these contributions, they receive statutory benefits such as retirement, disability, health, and more. Employees are compensated with higher salaries to account for their contributions to these statutory benefits. Employers in Turkey typically pay between 15.5% and 22.5% of an employee’s gross salary to the Social Security Institution (SGK). For unemployment, the percentage depends on incentives, which is usually 2% of the employee’s gross salary.
A 5-point reduction (bringing the employer rate down to 15.5%–16.75%) is available for many employers, especially in manufacturing or for compliant companies. These payments are calculated on a gross salary up to a monthly ceiling of TRY 297,270.00 as of January 1, 2026.
SGK premiums are required every month. Employers must submit monthly premium declarations and pay contributions before the deadline. Late payments can result in the loss of incentives for employers.
So far, we have learned what SGK is, how it works, why it matters for foreign employers, the process of registering, and its associated costs. In this section, let’s discuss three common mistakes that most employers make when registering with SGK and the serious consequences they may face:
Employers often assume that having a legal entity in Turkey such as an LLC or Joint Stock company, with a TIN and being mentioned in the trade registry gazette, means the government knows they are hiring employees and that they only need to pay SGK contributions at the time of payroll disbursement. This is a mistaken concept because SGK officials require you to register employees before they start work. Late registration leads to fines and retroactive premiums.
Register immediately after contract signing, before work begins.
Many employers do not realize that SGK contributions are calculated based on gross salary, not net salary. This simple concept can lead to serious issues. All allowances and bonuses must be included in the calculation. Incorrect salary declarations, especially by foreign employers, can result in the cancellation of work permits.
Use payroll software or accountants to ensure accuracy.
Since declarations are monthly, a weak system for managing employee records can result in missing payments for one or more months. Late or missed premium payments can lead to fines, retroactive payments, and even trigger government audits if repeated.
Set automatic reminders or use a payroll service under an EOR.
The best option to fully comply with SGK, remain calm, and save time is to let those who have been working as legal employers in Turkey for over two decades handle it. I mean FMC Group. Here is what this means:
FMC Group provides accounting management services in Turkey to assist with taxes, company payments, bookkeeping, and payroll. When you use this service, FMC Group handles all requirements from SGK on your behalf.
You can hire employees in Turkey without any local legal entity (LLC, Joint Stock, liaison office), trade register, chamber of commerce, SGK, or tax department by using FMC Group’s EOR service. FMC Group uses its own local resources to hire employees for you, and you only need to pay affordable monthly charges. There is no worry about local legal compliance, paying fines, or bearing delays associated with different types of registration.
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