Law No. 5510 brings everyone working in Turkey under a single system and settles three things for an employer: which category a person falls into, which notifications are due and when, and which premiums are payable on which base. An error in the first of those corrupts the other two.
This page covers the insurance categories, the employer’s notification duties and their deadlines, the premium rates and the earnings ceiling, what each branch of insurance provides, the rules for foreign employees, and the penalties.
Social insurance is governed by Law No. 5510 on Social Insurance and Universal Health Insurance, adopted in 2006 and in force since 2008. It replaced the former Social Insurance Law No. 506 together with Laws No. 1479 and 5434.
Material still citing Law No. 506 is describing a framework that has not applied for more than eighteen years. Some transitional provisions refer back to the earlier laws, but those are exceptions and the general rule is Law No. 5510.
Insurance Categories
| Category | Who it covers | Who pays |
|---|---|---|
| 4/a | Those employed under a service contract by one or more employers | Employer and employee together |
| 4/b | The self-employed; company shareholders and tradespeople | The insured person |
| 4/c | Those employed in public administration on established or contracted posts | The institution and the insured person |
| Universal health insurance | Residents of Turkey who fall into none of the above categories | The person themselves |
Shareholders of a limited liability company, and shareholders of a joint stock company who sit on the board, fall within category 4/b and pay their own premiums. A joint stock company shareholder who is not a board member is not insured on that basis.
The common error in practice is putting a shareholder on the company payroll under category 4/a. That reports both the category and the premiums incorrectly, and where it is identified, retrospective correction and late payment charges follow.
The Employer’s Notification Duties
- File the workplace declarationBefore employing the first insured person, a workplace declaration is filed with the unit for the location and a workplace registration number is issued. Branches and additional locations are notified separately.
- File the entry notification before work beginsThe entry notification must be filed before the employee actually starts work — not on the first day or afterwards. Different periods are prescribed for certain sectors and situations.
- File the monthly return on timeThe withholding and premium service return covers income tax withholding, stamp duty and social security in a single filing and is due by the 26th of the following month.
- Show missing days in the returnWhere days are under-declared because of sick leave, unpaid leave or part-time work, the reason is stated in the return. Supporting documents are not sent to the institution; they are kept at the workplace and produced on inspection.
- Pay wages through a bankAt workplaces with five or more employees, wages and similar payments must be made through a bank.
- File the exit notificationThe exit notification is filed within the prescribed period after insurance ends, and the exit code must reflect the actual reason for leaving.
The entry notification must be filed before work begins. An employee found working without one creates a problem well beyond the administrative fine: the start date then rests on assertion rather than record, and the way is open to a retrospective claim for service determination.
Choosing the exit code correctly matters equally. Using an employer-dismissal code on a mutual termination means the employer has declared its own dismissal on the official record, leaving its defence in a reinstatement claim without foundation.
Premium Rates and the Base
| Party | Item | Rate |
|---|---|---|
| Employee | Social insurance | 14% |
| Employee | Unemployment insurance | 1% |
| Employee total | — | 15% |
| Employer | Social insurance | 20.75% |
| Employer | Unemployment insurance | 2% |
| Employer total | Before any reduction | 22.75% |
| Employer total | Where the five point reduction applies | 17.75% |
Premiums are calculated on earnings subject to premium. The floor is the gross minimum wage and the ceiling is nine times that amount. The conditions for the five point reduction include having no overdue premium debt; where a debt arises, the reduction does not apply for that period.
The ceiling on earnings subject to premium was raised from 7.5 times the gross minimum wage to 9 times. The effect falls entirely on higher-paid staff: an employee whose salary sat above the old ceiling now attracts premiums on a materially larger base.
Because the employer cost rises although the salary has not changed, budgets built on the previous multiple understate the cost of senior employees.
Branches of Insurance
Short-term branches
- Cover
- Work accident, occupational disease, sickness and maternity
- Provide
- Temporary incapacity benefit, permanent incapacity income, nursing allowance
- Premium condition for sickness
- 90 days in the last year
- For work accidents
- No premium day condition
Long-term branches
- Cover
- Invalidity, old age and death
- Provide
- Invalidity pension, old age pension, survivors’ pension and lump sum payment
- Determined by
- Length of insurance, premium days and age
- Transitional rules
- Different conditions may apply by first insurance date
A work accident is notified to the institution within three working days following the day it occurred. Where no notification is made, the costs incurred by the institution up to the date of notification may be recovered from the employer.
Incapacity Benefit
| Situation | Waiting period | Rate |
|---|---|---|
| Illness, outpatient | First two days unpaid | Two thirds of daily earnings |
| Illness, inpatient | First two days unpaid | One half of daily earnings |
| Work accident and occupational disease | None | Same rates, from day one |
| Maternity | None | Two thirds of daily earnings |
Payment is made by the institution rather than the employer. The employer’s obligation is to notify that the employee did not work on the reported days and to show the missing days in the return.
See: sickness reports
Foreign Employees
- Foreign nationals working under a service contract in Turkey are as a rule insured under category 4/a
- Obtaining a work permit does not replace the insurance notification; they are separate obligations
- Where a person comes on temporary assignment from a country with a bilateral social security agreement, a certificate permitting continued coverage there may be obtained
- That certificate must be obtained before the assignment begins
- Scope and periods differ by country; each agreement carries its own conditions
- Without the certificate, a premium obligation arises in Turkey
- Where salary is paid in foreign currency by an employer abroad, the income tax exemption does not affect insurance status
- Insurance status and tax liability are assessed separately
Foreign nationals residing in Turkey who are not employed by an employer may be brought within universal health insurance where they meet the conditions. Application is made to the social security directorate for the place of residence, and the person must not be covered by another country’s social security system.
The premium is calculated as a percentage of the gross minimum wage and paid monthly. The rate and the application conditions change periodically and should be confirmed with the institution before applying. A separate rate and a separate application period apply to students.
Penalties
| Obligation | Consequence of breach |
|---|---|
| Workplace declaration | Administrative fine, varying with the size of the workplace |
| Entry notification | Administrative fine for each insured person, increased where repeated |
| Monthly return | Administrative fine and late payment charges |
| Premiums not paid on time | Late payment penalty and charges; entitlement to incentives and reductions is also lost |
| Wages not paid through a bank | Administrative fine per employee per month |
| Work accident not notified | Administrative fine and recovery from the employer of the costs incurred by the institution |
| Records not produced | Administrative fine; a further penalty where books and documents are treated as invalid |
Common Mistakes
- Proceeding on the basis of Law No. 506. The framework in force is Law No. 5510.
- Filing the entry notification on the first day. It must be filed before work begins.
- Declaring a shareholder under category 4/a. Limited company shareholders and board-member shareholders of joint stock companies fall under 4/b.
- Calculating the ceiling on the old multiple. The upper limit rose from 7.5 to 9 times the minimum wage.
- Applying the five point reduction while a debt is outstanding. An overdue premium debt removes the reduction for that period.
- Sending supporting documents for missing days to the institution. The reason goes in the return and the documents stay at the workplace.
- Selecting an exit code that does not reflect reality. The declared reason becomes evidence against the employer in any later dispute.
- Not notifying a work accident within three working days. The costs incurred by the institution may be recovered from the employer.
Frequently Asked Questions
Which law governs social insurance in Turkey?
When must the entry notification be filed?
What are the premium rates?
What is the ceiling on earnings subject to premium?
Under which category are company shareholders insured?
How does insurance work for foreign employees?
When must a work accident be notified?
Who pays for sick days?
As the Ozbek CPA team, we handle the employer side of social security obligations in Turkey — workplace and insured person notifications, monthly return filings, structuring the premium base correctly, monitoring the conditions for incentives and reductions, missing day and sick leave notifications, and assessing the scope of bilateral agreements for foreign employees. See also our pages on payroll services, Turkish labour law, sickness reports and work permits. Contact us.
