Updated on: 2025/08/04 14:35 (UTC)
Overview
Turkey is a constitutional republic with a parliament, and it is a transcontinental country mostly located in the Middle East but with a northwest portion in Europe. Turkey consists of 81 first-order administrative divisions known as iller. The countries that border Turkey are Greece to the west, Bulgaria to the northwest, Georgia to the northeast, Armenia and Iran to the east, Azerbaijan to the east via its exclave of the Nakhchivan Autonomous Republic, Iraq to the southeast, and Syria to the south. The Black Sea borders Turkey to its north and the Mediterranean Sea borders Turkey to its south and southwest. The European and Middle Eastern parts of Turkey are separated by three bodies of water: the Sea of Marmara, which borders Turkey’s part in Europe to the southeast and Turkey’s part in the Middle East to the northwest; the Dardanelles Strait, which is to the southwest of the Sea of Marmara; and the Bosphorus Strait, which is to the northeast of the Sea of Marmara. Turkey also controls numerous islands in the western part of the country, including some that have populations of more than 1,000 residents, such as Avsa (Türkeli), Gökçeada (Imbros), and Heybeliada. In the Turkish language, Turkey’s name is rendered as Türkiye.
Turkey’s currency is the Turkish lira.
Employers in Turkey are responsible for withholding income taxes, withholding social taxes, and making social tax payments as a percentage of payroll.
Employers are also responsible for following the compensation and benefit regulations of the Labor Law.
Foreign workers in Turkey generally are subject to the same taxation, compensation, and benefits provisions as Turkish nationals, but must obtain the proper visas and permits to work legally in Turkey.
Turkish citizens working in the United States must comply with the appropriate visa requirements, labor, and tax laws.
CURRENCY DETAILS
The currency of Turkey is the Turkish lira (), also known as the new Turkish lira or Turkish new lira and distinct from a previous currency known as the Turkish lira that had been used from 1923 to 2005. The internationally recognized three-letter currency code for the Turkish lira is TRY, which is an abbreviation of Turkey. The standard plural form of Turkish lira is the same as its singular form, although the plural form Turkish liras sometimes is used.
When an amount of Turkish lira is written using the currency symbol , the symbol follows the numerical value with a space between the numerical value and symbol. When an amount of Turkish lira is written using the currency symbol TL, the symbol either precedes or follows the numerical value with a space between the numerical value and symbol. The currency symbol YTL sometimes is used to clarify applicability to the new Turkish lira, with the “Y” an abbreviation of the Turkish word yeni, which translates to the English word new, and this symbol has the same placement treatment as the currency symbol TL.
One hundredth ( 1 ⁄ 100 ) of a Turkish lira is referred to as a kurus, which has the same standard plural form as its singular form.
When amounts of Turkish lira are written in Turkish, the comma that in English separates the thousands place from the hundreds place instead is rendered as a dot (.), and the dot that in English separates the ones place from the tenths place instead is rendered as a comma.
TAXES
The national government enacts laws relating to income taxes. In addition, employers must implement wage withholding and separate contributions to the Turkish Social Security system.
The Turkish tax year is the calendar year, Jan. 1 to Dec. 31.
There are no local employment-related taxes.
Coronavirus (Covid-19) Guidance: Turkey extended deadlines for filing income tax returns in April 2020, May 2020, and June 2020 until July 27, 2020, by 6 months for employers in several sectors and extended deadlines for filing deposits to Oct. 27, 2020, Nov. 27, 2020, and Dec. 28, 2020. Employers in the listed sectors directly affected by the coronavirus from April 1 to June 30 also can postpone social tax deposits so that insurance premiums for March 2020, are now due Nov. 2, 2020, April 2020 premiums are now due Nov. 30, 2020, and May 2020 premiums are now due Dec. 31, 2020. No penalties will be applied.
Employers that applied for short-time working allowances or related benefits before July 1, 2020, and have returned to normal working hours may request a reduction in employer and employee social taxes for up to three months, starting with the month after the employer is no longer receiving short-time working allowances and lasting until Dec. 31, 2020, at the latest. The amount of the reduction per employee depends on the average number of days that the employee received benefits over three months, with a maximum reduction of 1,103.60 per month for employees who received benefits for an average of 30 days per month. The reduction does not have to be applied for, but should be indicated on social tax returns starting with the August 2020 return.
Income Taxes
The Income Tax Law of 1960 (ITL) sets the requirements for employer income tax withholding. The Presidency of Revenue Administration (Gelir Idaresi Baskanlıgı) administers the Turkish revenue and tax system.
Coverage: Employers must withhold income tax from salaries and wages derived from dependent personal services or employment.
Employers operating in Turkey’s Special Investment Zones, which include a range Technology Development Zones (TDZs), Free Zones (FZs), and Organized Industrial Zones (OIZs), may qualify for reduced responsibility for withholding taxes.
Employees: Employees subject to income tax withholding include all workers performing services, while in a dependent position, to any employer in exchange for remuneration of any kind.
Residents are taxed based on their global income while nonresidents are taxed on their income of Turkish origin. Residents are considered those who reside in Turkey more than six months, except if they are foreign workers in Turkey for a specific job as enumerated in the tax law.
Rates and Thresholds: Income tax rates are levied on a progressive scale for residents, with rates ranging from 15% to 35%. Additionally, Turkey provides income tax deductions of 90% for personnel with PhD degrees and 80% for other personnel working in research and development projects approved by the Ministry of Finance.
Effective for 2021, with regard to employment income, Turkey’s personal income tax rates for residents and minimum and maximum amounts of annual income for each tax bracket are as follows:| Range of Annual Income (Turkish Lira) | Income Tax Rate |
|---|---|
| Up to 24,000 | 15% |
| More than 24,000 and up to 53,000 | 3,600 plus 20% on the amount in excess of 24,000 |
| More than 53,000 and up to 190,000 | 9,400 plus 27% on the amount in excess of 53,000 |
| More than 190,000 and up to 650,000 | 46,390 plus 35% on the amount in excess of 190,000 |
| More than 650,000 | 207,390 plus 40% on the amount in excess of 650,000 |
| Range of Annual Income (Turkish Lira) | Income Tax Rate |
|---|---|
| Up to 22,000 | 15% |
| More than 22,000 and up to 49,000 | 3,300 plus 20% on the amount in excess of 22,000 |
| More than 49,000 and up to 180,000 | 8,700 plus 27% on the amount in excess of 49,000 |
| More than 180,000 and up to 600,000 | 44,070 plus 35% on the amount in excess of 180,000 |
| More than 600,000 | 191,070 plus 40% on the amount in excess of 600,000 |
A second set of Turkish income tax brackets applicable to income from sources other than employment differs from the brackets presented in this primer regarding the maximum income threshold for the 27% bracket and in excess of which the 35% bracket is in effect.
Effective for 2021, this alternative threshold was set at 130,000 instead of 190,000 . Effective for 2020, this alternative threshold was set at 120,000 instead of 180,000 .
Registration: All employers must register their companies with the Commercial Registry after having deposited 0.04% of their capital in the central bank (Ziraat Bankasi). Upon doing so, the Commercial Registry then notifies the Tax Office and the District Employment Office of the company’s incorporation. After the Tax Office receives the notification from the Commercial Registry, employers must apply for a tax identification plaque with the local tax office and pay an application fee.
Employers wishing to operate in Turkey’s Special Investment Zones must apply to the local Special Investment Zone authority and register with the Ministry of Industry and Trade.
Taxable Amounts: Net wages for the purpose of calculating income tax withholding should be computed based on total remuneration minus allowable deductions. Remuneration is defined as salaries and wages, in addition to supplementary income such as allowances, bonuses, anniversary gifts, gratuities, commissions, premiums, compensations, and other wage and other salary related remunerations. Deductions include pension dues, social security premiums, individual insurance and pension contributions, union dues, and disability allowances. Tax tables are available on the PRA website.
Employers operating in FZs, TDZs, and OIZs may qualify for reduced withholding requirements. Specifically, employees working in free zones are exempt from income tax on salaries so long as their employers meet certain export value requirements. R&D and support personnel employed in TDZs are exempt from all taxes until Dec. 31, 2023. However, the number of support personnel covered by the exemption may not exceed 10% of the number of R&D personnel. Employees operating in OIZs are given several incentives, among them a complete exemption from income taxes on wages of employees working in OIZs.
Withholding Methods: Income taxes must be withheld from every worker’s paychecks and remitted monthly. If employers are exempted from income tax withholding, they still must make monthly income tax withholding filings.
Returns and Remittance: All employers must make monthly payments and returns on income tax withheld. Returns and payments must be made by the 26th of the month.
Recordkeeping: Tax records must generally be kept for a minimum of five years.
Penalties: Late payments are assessed an interest fee of 1.4% of taxes due for every month overdue.
Social Taxes
Turkey requires all employers to withhold social security and unemployment insurance contributions from workers and to make contributions. The Turkish Social Security system is regulated by the Social Security Institution (SSI) and consists of funds for worker’s compensation, pension, and general health insurance. In Turkish, the Social Security Institution is known as Sosyal Güvenlik Kurumu (SGK).
Unemployment insurance is regulated by the Turkish Employment Agency, although employers must provide all unemployment insurance reporting and payments to the SSI.
Employers and employees are required to provide contributions to a public pension program that provides benefits for circumstances of disability, old age, and death (malüllük, yaslılık ve ölüm). Employees, but not employers, also are required to provide contributions to a private pension plan, under the country’s Private Pension System (Bireysel Emeklilik Sistemi, abbreviated as BES).
Effective since Jan. 1, 2019, Turkish employers with at least five employees must automatically enroll Turkish employees younger than the age of 45 in a private pension plan. Employers must withhold the employee contribution and remit it to the pension administrator no more than one business day following the salary payment.
Employees seeking to opt out of the private pension plan must do so within two months of receiving notification of their automatic enrollment.
Employers and employees also are assessed contributions for general health insurance (genel saglık sigortası) and unemployment insurance (issizlik sigortası). Employers, but not employees, also are assessed contributions for short-term insurance branches (kısa vadeli sigorta kolları), which are designed to provide cash benefits for some aspects of work accident and occupational disease insurance, sickness insurance, and maternity insurance.
Coverage: All employers generally must withhold Social Security contributions from employee salary and payments.
Employer Social Security obligations start on differing dates depending on the type of business, with a few examples as follows:
- joint ventures: from the date when income tax liabilities begin;
- limited liability companies: from the date of registry into the trade registry office; and
- corporations: from the date of election of the board of directors.
Rates and Thresholds: Social tax contributions are equivalent to 37.5% of employee salary, with employers contributing 22.5% and employees contributing 15%. Social security contributions are assessed as follows:
For employers:
- Public pension program: 11%
- Short-term social security insurance: 2%
- General health insurance: 7.5%
- Unemployment insurance: 2%
For employees:
- Public pension program: 9%
- General health insurance: 5%
- Unemployment insurance: 1%
The minimum and maximum monthly earnings on which contributions to the Social Security Institution (SSI) are assessed are determined by Turkey’s gross monthly minimum wage. The minimum monthly earnings on which SSI contributions are assessed is equal to the gross monthly minimum wage, and the minimum daily earnings on which SSI contributions are assessed is equal to one thirtieth ( 1 ⁄ 30 ) of the gross monthly minimum wage. The maximum monthly earnings on which SSI contributions are assessed is equal to 7.5 times the gross monthly minimum wage, and the maximum daily earnings on which SSI contributions are assessed is equal to 7.5 times the minimum daily earnings on which SSI contributions are assessed.
Effective for 2021, the minimum and maximum amounts of monthly income on which social security contributions are assessed respectively are 3,577.50 and 26,831.40 , and the minimum and maximum daily earnings on which SSI contributions are assessed respectively are 119.25 and 894.38. Effective for 2020, the minimum and maximum amounts of monthly income on which social security contributions were assessed respectively were 2,943 and 22,072.50 , and the minimum and maximum daily earnings on which SSI contributions were assessed respectively were 98.10 and 735.75 .
Employers with new employees in the energy sector in certain provinces may have their premiums reduced.
Employers may take advantage of several incentives to reduce their social taxes.
Employees are required to contribute 3% of wages to a private pension plan, and employers are not required to contribute to an employee’s private pension plan.
Registration: Employers must register all new employees with the Social Security Institution by filing an insurance holder employment report by the new employees’ hire dates for those employed in construction, fishing, or agriculture, and by the day before the new employees’ hire date for other employees.
Registration of employers with SSI is done automatically by the Trade Registry Office after employers have applied for trade permits.
Taxable Amounts: SSI contributions generally are levied on all wages and benefits, including pensions, employer provided benefits, severance pay, and private health insurance premiums.
Monthly premiums for dependent work are based on work performed from the 15th day of the previous month until the 14th day of the month when payments are due.
Employers that have applied to PRA and been accepted for Research and Development deductions and exemptions, as well as qualifying employers that operate within OIZs, will receive a 50% reduction in employer contributions for up to five years. Application materials and requirements are available on the PRA website.
Returns and Remittance: Monthly payments and returns are due by the end of every month. In the case that the last day of the month falls on a national holiday, premiums are payable by the following workday.
Three percentage points of these contributions (two percentage points of employer contributions and one percentage point of employee contributions) are payable to the Turkish Employment Agency while all other social tax payments are payable to SSI.
Additionally, employers must report all work related injuries to the police immediately and must report to SSI within three workdays of being informed of the incident.
Recordkeeping: Employers generally must keep workplace records and documents relating to SSI contributions for 10 years, beginning the year following the year in which the taxes were paid.
Penalties: Penalties are as follows:
- Non-payment of social security contributions results in a monthly penalty of 2%.
- Incomplete or incorrect monthly filings will be assessed a fine equal to half of the monthly minimum wage.
- Failure to register new employees will result in fines of one times the minimum monthly wage per employee. If a fine is ordered as a result of a court order, the fine increases to two times the minimum wage per unregistered employee. If employers fail to register new employees with a year, they will be charged a fine of five times the minimum wage per unregistered employee.
- Employers that are found to have willfully caused work related injuries and/or accidents or that violated the legislation on the protection of health and labor safety are liable for all SSI payments made to the disabled employees.
- Employers that make late reports on work related accidents are responsible for SSI payments to the effected employees up until the date the employers notified SSI.
Other Taxes
Turkey’s national government does not assess any taxes on employment income other than those covered in the Income Taxes and Social Taxes sections of this primer.
State/Jurisdiction Taxes
Taxes on employment income are not assessed by any of Turkey’s iller or local jurisdictions.
COMPENSATION AND BENEFITS
Terms of employment-based compensation and benefits in Turkey are mainly regulated by the Ministry of Family, Labor and Social Services and the Labor Law. Employers must comply with the ministry’s mandates and inspections. The Labor Law in Turkey regulates minimum wage, overtime, hours of work, holidays, leave, wage payment, and termination pay. Worker’s compensation and retirement plans are covered by social taxes.
Terms of employment are governed by the Labor Law. All employment relationship are governed by the Labor Law as adjudicated by the Labor Courts.
Minimum Wage
The government of Turkey generally adjusts the country’s minimum wage (asgari ücret) each year. The country’s Ministry of Family, Labor and Social Services designates both a gross pretax minimum wage amount and a net minimum wage amount after taxes and deductions.
Effective for 2021, the gross monthly minimum wage is 3,577.50 and the net monthly minimum wage after taxes and deductions is 2,825.90 . Effective for 2020, the gross monthly minimum wage was 2,943 and the net monthly minimum wage after taxes and deductions was 2,324.70 .
Overtime
Employers must begin to pay overtime for work performed in excess of 45 hours per week. Overtime must be compensated at 50% above normal wages. Total overtime may not exceed 270 hours in a calendar year.
Employees may choose to receive leave in lieu of pay for overtime worked at a rate of 1.5 hours for every hour of overtime worked. This leave must be taken within six months of the date on which overtime work was performed.
Work performed on holidays must be paid at double wages.
Hours of Work
The maximum workweek is 45 hours. A work day may not exceed 11 hours in a day under any circumstances.
Employers must grant employees with an unpaid break in work shifts as follows:
- shifts of four hours or less; fifteen minute break;
- shifts between four and 7.5 hours; half an hour break;
- shifts more than 7.5 hours; one hour break.
Night work is defined as work performed between the hours of 10 p.m. and 6 a.m. and is limited to 7.5 hours at normal wage and generally to 11 hours. In the case of workplaces with alternating shifts, night work must not exceed a week. Employers must have periodic health examinations to certify that employees are fit for night time work every two years at the employer’s expense.
Holidays
Employers must provide all employees with nine mandatory paid public holidays.
The mandatory public holidays specified in the Labor Law are as follows:
- Jan. 1: New Year’s Day (Yılbaşı)
- April 23: National Sovereignty and Children’s Day (Ulusal Egemenlik ve Çocuk Bayramı)
- May 1: Labor and Solidarity Day (Emek ve Dayanişma Günü)
- May 19: Commemoration of Ataturk, Youth and Sports Day (Atatürk’ü Anma Gençlik ve Spor Bayrami)
- Ramadan Feast (Ramazan Bayramı), internationally also known as Eid al-Fitr; in Turkey, the holiday spans about 3.5 days, starting 1 p.m. on the last day of the Islamic month of Ramadan (Ramazan) and ending the third day of the Islamic month of Shawwal (Şevval)
- July 15: Democracy and National Unity Day (Demokrasi ve Milli Birlik Günü)
- Aug. 30: Victory Day (Zafer Bayramı)
- Feast of Sacrifice (Kurban Bayramı), internationally also known as Eid al-Adha; in Turkey, the holiday spans about 4.5 days, starting 1 p.m. on the ninth day of the Islamic month of Dhu al-Hijjah (Zilhicce) and ending the 13th day of that month
- Oct. 28 starting 1 p.m., and Oct. 29: Republic Day (Cumhuriyet Bayramı), with Oct. 29 the formal holiday and paid leave also granted starting 1 p.m. the day before
The specific Gregorian Calendar dates of the Ramadan Feast and Feast of Sacrifice are subject to annual variation because the Islamic Calendar is a lunar calendar that does not directly align to the Gregorian Calendar.
Leave
Annual leave in Turkey varies with tenure as follows:
- between one and five years of employment (with the same employer); 14 days;
- between five and 15 years of employment; 20 days;
- more than 15 years of employment; 26 days.
Sick leave: All employees are entitled to sick leave paid for by Social Security.
Paid parental leave: Pregnant employees are entitled to 16 weeks of maternity leave—eight weeks before the baby’s due date and eight weeks afterwords—paid for by Social Security. In the case of multiple births, employers must provide two additional weeks of maternity leave. Employers must also provide female employees with paid leave for periodic medical examinations during pregnancy.
Employers must also provide up to six months of unpaid leave after the termination of paid maternity leave if employees request it.
Employers must provide 1.5 hours of paid nursing leave per day for all mothers with children under the age of one.
To qualify for maternity benefit, a woman must have worked at least 120 days within the last year and must submit a medical report from a doctor to a local social security office. A woman can receive up to two-thirds of her salary during the 16 week maternity leave.
Wage Payment
Employers must pay wages at least monthly.
Employers are required to provide employees with a signed pay slip, which must include the date of payment, the pay period, all supplements to basic wages, and all deductions.
In the case that wages are based on commissions or tips, employers must document all such payments to ensure that tips and commissions are paid in full to employees.
Bonuses and Special Benefits
Turkey does not mandate employers to provide bonus payments to employees.
Termination Pay
Upon termination of employment, all employers must provide employees with certificates of employment stating the nature and duration of the terminated employment relationship.
Notification periods are equal for both employers and employees and vary based on the duration of the employment relationship as follows:
- employed zero to 6 months; two weeks of notice;
- employed 6 to 18 months; four weeks of notice;
- employed 18 to 36 months; six weeks of notice;
- employed more than 36 months; 8 weeks of notice.
Notification periods may be forgone in exchange for the compensation corresponding to the notification period.
Employers must provide employees with severance in the case that the employees terminate the employment relationship with cause or the employers fire the employees without cause.
Workers’ Compensation
Workers’ compensation is provided by social security.
Recordkeeping
Employers must keep a personnel file for every employee documenting the employment relationship.
Employers must submit the list of employees working night shifts to the relevant regional directorate of labor along with their health certifications for night time employees. This must be delivered before employees begin work and on a periodic basis.
The statutory limitation on wage claims is five years.
FOREIGN WORKERS
Foreign workers are entitled to the same rights as Turkish citizens and are generally covered by the same tax and workplace laws.
In order to employ foreign workers, employers must employ at least five Turkish citizens, pay foreign workers at certain rates, and ensure that all foreign workers have proper work and residence permits.
Visas: All foreign workers wishing to work in Turkey must obtain a work permit, work visa, and residence permit before beginning work.
There are four versions of work permits:
- ordinary work permits for a specific workplace or economic sector valid for one year and renewable for a second and third year,
- independent work permits of defined duration for those working with multiple entities and
- permanent work permits available to foreign holders of a long-term residence permit or another work permit for at least eight years.
- permanent work permit to recognized academics, investors and highly trained professionals
Holders of permanent work permits will be granted rights similar to those of Turkish citizens, except for the rights to vote, be elected or work as a civil servant or the duty to perform military service.
In order to apply for a work permit, employers must send an application, a balance sheet and profit and loss statement for the past year certified by the tax authorities to the Ministry of Family, Labor and Social Services. Additionally, employers intending to employ foreign experts in the fields of engineering, construction, contracting, or consultation services must send pay slips of Turkish citizens working in the same positions and the contract between the foreign expert and the employer to the ministry.
Employers must apply for a work visa at the nearest Turkish Embassy/Consulate after having signed a contract with their employer and received a work permit.
To apply for a residency permit, foreign workers are required to apply at the local police station within 90 days of arriving in Turkey.
Taxes: Foreign workers are taxed at the same rates as citizens. Turkish residents are taxed on their global income while nonresidents are taxed on their Turkish sourced income. Turkish residents are defined as those who reside in Turkey for more than 180 days in a calendar year.
Employers should declare foreign employees to the Turkish Social Security Institution within 30 days from the date on which a work permit is issued.
Foreign workers who are residents of countries with which Turkey has a totalization agreement for social tax purposes are not liable for Social Security withholding. In order to qualify for this exemption, foreign workers must apply to the Social Security Institution and inform employers.
Wages/Payments: Wages must be paid in Turkish lira but may be determined in foreign currency. If wages are determined in foreign currency they must be converted to Turkish lira at the applicable currency conversion rate on the date of payment.
Foreign workers must be paid at rates equivalent to their Turkish counterparts when accounting for the foreign workers’ qualifications and the job specifications. Additionally, foreign workers must be paid at rates equivalent or greater than the following, depending on their expertise level as follows;
- senior executives, pilots, and engineers and architects requesting preliminary permits; 6.5 times the minimum wage;
- unit or branch managers, engineers, and architects; four times the minimum wage;
- jobs requiring expertise and proficiency, and teachers; three times the minimum wage;
- home service occupations; 1.5 times the minimum wage.
WORKING IN THE UNITED STATES
Foreign workers from Turkey must meet general visa requirements and be certified to be employed in the U.S. General visa requirements for the U.S. are included in the separate
Turkish workers are eligible to work in the U.S. under H-2B visas, which cover labor or services of a temporary or seasonal nature in occupations other than agriculture or registered nursing. The number of H-2B visas issued each year is limited by U.S. law.
U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.
For tax purposes, Turkish citizens are subject to U.S. employment-based taxation on income earned in the U.S. unless they can claim an exemption under certain tax treaty provisions or they work under specific visa types that exempt earnings from taxes. Turkey has a tax treaty with the U.S.
State and local taxation of Turkish workers also can apply, although some states within the U.S. recognize international tax treaties that can eliminate that income tax liability for foreign workers.
The U.S. labor laws apply to all workers employed and providing services in the country.
Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.
Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the
Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.
Income Taxes: Generally, nonresidents in the U.S. who are from Turkey and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.
A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from Turkey and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.
Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the
Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.
An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the
Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.
Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.
Tax treaties: Turkey and the U.S. have a tax treaty with provisions addressing host country taxation of the nonresident workers. A summary of those benefits is listed in the Tax Treaty Exemption Comparison Chart. To claim the treaty benefit, the nonresident must file Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with the employer.
Students, trainees and teachers in particular must include a statement with Form 8233 to claim a tax treaty exemption from withholding of tax on compensation for dependent personal services. This statement affirms that the student, trainee, teacher or researcher is temporarily in the U.S. for purposes of studying or has accepted an invitation by the U.S. government (or by a political subdivision or local authority) for the purpose of teaching or engaging in research for a period not expected to exceed two years for teachers by a university or other recognized educational institution in the U.S. It also must affirm that the individual will receive compensation for services performed in the U.S. There no limit is placed on the teacher or student compensation for Turkish residents.
Examples of the statements necessary to claim a treaty exemption from U.S. taxes are included in Internal Revenue Service Publication 519, U.S. Tax Guide for Aliens.
Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.
Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.
Totalization Agreements: Turkey and the U.S. have not entered into a totalization agreement.
Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.
There are no particular requirements that employees be paid in U.S. dollars.
TREATY ARRANGEMENTS
Turkey has entered into more than 80 income tax treaties, including an income tax treaty with the United States .
The countries with which Turkey has a bilateral income tax treaty in effect are Albania, Algeria, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, China, Croatia, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kosovo, Kuwait, Kyrgyzstan, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Netherlands, New Zealand, Norway, Oman, Pakistan, Philippines, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sudan, Sweden, Switzerland, Syria, Tajikistan, Thailand, The Gambia, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Vietnam, and Yemen.
Turkey has social tax totalization agreements with Albania, Austria, Azerbaijan, Belgium, Bosnia and Herzegovina, Canada, Czech Republic, Denmark, France, Germany, Georgia, Kyrgyzstan, Libya, Luxembourg, Macedonia, Mongolia, Netherlands, Norway, Quebec, Romania, Sweden, Switzerland and the Turkish Republic of Northern Cyprus, and Ukraine for social tax coverage purposes.
RESOURCES
All resources in English unless otherwise noted.
General
Invest in Turkey
CIA World Factbook: Turkey
U.S. State Department: U.S. Relations With Turkey
Currency Details
Unicode Consortium: Currency Symbols
International Organization for Standardization: Currency Codes - ISO 4217
United Nations: United Nations Terminology Database: Turkey
Taxes
Presidency of Revenue Administration (Turkish)
Coordination Council for the Improvement of the Investment Environment (Turkish)
Ministry of Trade: Free Zone Legislation (Turkish)
Industrial Zone Legislation (Turkish)
Social Security Institution (Turkish)
Law No. 7193, Income Tax Changes for 2020 (Turkish)
Income Tax General Notice No. 313 of Dec. 29, 2020 (Turkish)
Social Security Law (Turkish)
Private Pension Plans Law (Turkish)
Unemployment Insurance Law (Turkish)
DLA Piper: Employee Stock Purchase Rights
Compensation and Benefits
Ministry of Family, Labor and Social Services (Turkish)
- 2021 Minimum Wage (Turkish)
Labor Law
Turkey General Holidays Law (Turkish)
Foreign Workers
Consular Website of the Republic of Turkey (Turkish)
Ministry of Foreign Affairs: Visa Information for Foreigners
Turkish Embassy in Washington (Turkish)
Law on Work Permits For Foreigners (Turkish)
Working in the United States
U.S. Department of Labor:
- Foreign Labor Certification
- Hiring Foreign Workers
U.S. Internal Revenue Service:
- IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
- IRS Publication 15, Circular E, Employer’s Tax Guide
- IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
- IRS Publication 519, U.S. Tax Guide for Aliens
- IRS Publication 901, U.S. Tax Treaties
Treaty Arrangements