10/10/2023

How to pay a Turkish employee without creating a subsidiary?

turkish employee

Paying a Turkish employee without creating a subsidiary typically involves using an intermediary or outsourcing payroll and employment-related tasks to a third-party service provider.

Here are the steps to pay a Turkish employee without establishing a subsidiary:

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Create a legal employment agreement between your company and the Turkish employee. This agreement should outline the terms of employment, salary, benefits, and any other relevant details.

Transfer the necessary funds to the payroll service provider’s designated bank account to cover the employee’s salary, taxes, and any other payroll-related expenses.

Share all necessary employee information with the payroll provider, including personal details, tax identification numbers, and bank account information.

The payroll provider will calculate and process the employee’s salary, withhold the appropriate taxes and social security contributions, and ensure that all legal requirements are met.

The provider will handle all tax-related matters, including filing and payment of taxes on behalf of your employee and your company.

The payroll provider will generate and provide payslips to your employee, detailing their earnings, deductions, and net pay.

If your employee is entitled to benefits like health insurance, the payroll provider can help administer these benefits and ensure compliance with local regulations.

Ensure that your employment practices comply with Turkish labor laws and regulations. The payroll provider can assist in this regard.

Stay in regular communication with the payroll provider to address any issues, changes in employment terms, or updates related to your Turkish employee.

The payroll provider may provide you with regular reports on payroll expenditures, tax payments, and compliance to keep you informed.

When the employment relationship ends, the payroll provider can assist in the proper termination process, including final salary settlements and tax compliance.

By outsourcing payroll and employment-related tasks to a reputable local service provider, you can efficiently pay your Turkish employee while avoiding the complexities and costs associated with establishing a subsidiary. However, it’s essential to choose a reliable and experienced service provider to ensure smooth operations and compliance with Turkish labor and tax regulations.

If cost-effectiveness is a priority for you, we recommend considering the outsourcing of our Umbrella Company solution:

  • Azkan will oversee the entire recruitment process.
  • Additionally, we offer to take care of your payroll needs on your behalf, which entails:
    • Azkan handling the recruitment of your employees.
    • Our team executing employment contracts, processing salary payments, and managing tax payments.
    • If necessary, we can also arrange for car rentals for your employees.

By adopting this solution, you can avoid the complexities of setting up a separate entity.

Azkan Group can support you in your Employer of Record (EOR) and payroll requests (also called Umbrella Company) in Turkey. We can manage your HR requests even if you don’t have a legal entity in Turkey.