Social Security Registration In Turkey

Who Needs to Social Security Register in Turkey?

Social security registration is required for all businesses that hire employees, including:

• Corporations (A.Ş.)
• Limited Liability Companies (Ltd. Şti.)
• Sole Proprietorships
• Foreign Companies Operating in Turkey
• Public Sector Employers

All employees, including full-time, part-time, and temporary workers, must be registered under the Turkish social security system.

Social Security System in Turkey

Turkey's social security system is governed by the Social Insurance and General Health Insurance Law No. 5510, which covers:

• Retirement Insurance (Pension)
• Health Insurance
• Unemployment Insurance
• Occupational Accident and Disease Insurance
• Maternity Insurance

The SGK (Sosyal Güvenlik Kurumu) is responsible for administering these services and ensuring that both employees and employers comply with their obligations.

Need you more info? Click the link of Turkish Social Security System

How to Register Your Business for Social Security

To register a business with the Social Security Institution (SGK), the following steps should be followed:

Step 1: Establish the Business

Before registering for social security, the business must be officially established. This involves registering the company with the Trade Registry and obtaining a tax number from the Turkish Revenue Administration.

Step 2: Obtain an Employer Registration Number

Once the business is established, the employer must apply to the SGK to obtain an employer registration number. This number is unique to each employer and is used to track social security contributions.

• The application can be submitted online through the e-SGK portal or in person at an SGK office.
• The employer needs to provide documents such as the company's registration certificate, tax number, and employment contracts.

Step 3: Register Employees

After receiving the employer registration number, each employee must be registered with the SGK. The employer is responsible for completing this process. The registration must be completed before the employee starts working, and the following documents are typically required:

• Employee's ID card or passport (for foreign employees)
• Residence permit (for foreign employees)
• Employment contract

Step 4: Submit Monthly Premium Declarations

Employers are required to submit monthly social security premium declarations to the SGK. These declarations detail the wages paid to employees and the social security contributions for each worker.

• The declarations must be submitted by the 23rd of each month, and payments are due by the end of the month.

Social Security Contributions in Turkey

Both employers and employees are required to make social security contributions. Additionally, the state contributes 1% to unemployment insurance.The contributions are based on the employee's gross salary, and the rates are as follows:

• Employer's Contribution: 20.5% – 22.5% (depending on the sector)
  • Retirement Insurance: 11%
  • Health Insurance: 7.5%
  • Unemployment Insurance: 2%
• Employee's Contribution: 15%
  • Retirement Insurance: 9%
  • Health Insurance: 5%
  • Unemployment Insurance: 1%
• State's Contribution
  
  • Unemployment Insurance: 1%

These contributions cover the employee's pension, health insurance, unemployment insurance, and other social benefits.

Special Rules for Foreign Employees

Foreign nationals employed in Turkey must also be registered with the SGK, but there are some additional steps:

• The foreign employee must obtain a work permit before being hired.
• Some foreign nationals may be exempt from Turkish social security contributions if their home country has a bilateral social security agreement with Turkey. In such cases, the employee can provide a certificate of coverage from their home country to avoid dual contributions.

If you need much more info about work permit for Turkey, Click the link of How to Get Working Visa in Turkey

Obligations of Employers in Turkey

In addition to registration and contribution payments, employers have several other obligations:

1. Workplace Notification: Employers must notify the SGK of any new workplace establishment within 10 days of its opening.
2. Employee Registration and Termination: Employers must register employees with the SGK before they start working and notify the SGK when an employee is terminated or leaves the company.
3. Accident Reporting: Employers must report workplace accidents to the SGK within three days of the incident.
4. Record Keeping: Employers must maintain accurate payroll records and employment contracts to ensure compliance with SGK regulations.

Penalties for Non-Compliance

Non-compliance with social security obligations can result in severe penalties, including:

• Fines for failing to register the business or employees
• Late payment penalties for delayed social security contributions
• Legal action from the Ministry of Labor for not adhering to labor laws

Employers can also face audits from the SGK, and discrepancies in contributions or employee registrations may lead to additional fines and back payments.

Social Security Incentives for Employers in Turkey

The Turkish government offers several incentives to encourage social security compliance and promote employment. These include:

• Discounts on social security premiums for companies employing women, youth, or disabled individuals
• Regional incentives for businesses operating in underdeveloped areas
• Temporary reductions in employer contributions for certain industries

Employers should consult with SGK advisors or a Turkish CPA to determine if they qualify for any of these incentives.

Need more detail? Click the link Tax & Social Security Incentives in Turkey

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.