How to pay contractors in Turkey

How to choose: five questions for paying a contractor in Turkey

1. Does the contractor rely on the service-export deduction? From 2026, income from software, design, engineering, data processing and other listed services used abroad is 100% deductible, under Article 89/1-13 of the Income Tax Law as amended by Presidential Decision 11257 (EY, checked 2026-09-28). The deduction holds only if the invoice is issued in the foreign customer’s name and the full amount is transferred to Turkey by the annual return deadline (aliozansahin.com, checked 2026-09-28). A contractor who keeps earnings on a Wise or Payoneer balance risks losing it (ilkkod.com, checked 2026-09-28). If the contractor claims the deduction, pay by SWIFT or through a platform that pays out to their Turkish bank account. If a platform pays into its own wallet first, agree when the money moves to Turkey.

2. Is the engagement full-time for one client? The Labour Law defines an employment contract by work performed in subordination to an employer (Law No. 4857, Art. 8, ILO NATLEX, checked 2026-09-28). Courts look at the facts: exclusive service, fixed daily hours, line management, company equipment and a monthly fee regardless of deliverables point to employment. A reclassified contractor can claim notice, annual leave and severance, and social security premiums are owed retroactively; foreign choice-of-law clauses may not shield the client (ccs.law, checked 2026-09-28). Severance alone is 30 days’ pay per year of service, capped at TRY 73,729.87 per year from 1 July 2026 (demiraydinhukuk.com, checked 2026-09-28). If the contractor has several clients and sets their own hours, a payout tool or a bank transfer is enough. If they work only for you, full-time, use a Contractor of Record: 4dev acts as the contracting party for each contractor, which reduces reclassification risk (see contractor misclassification). If the role is really a job, Deel, Remote and Multiplier run Contractor of Record and EOR on one platform.

3. Dollars, euros or lira? Turkish residents may keep foreign currency earned from services to non-residents; the obligation to bring proceeds home within 180 days and sell 35% of them to the central bank applies to goods exports documented by customs declarations (istanbulmalimusavirlik.net, checked 2026-09-28). The contractor issues the e-SMM with the currency amount and its lira value at the central bank rate (musavirlerkulubu.com.tr, checked 2026-09-28). A contract priced in lira loses value fast: the dollar cost 17.9% more lira on 25 September 2026 than a year earlier (41.3950 against 48.7901 at the central bank’s buying rate, tcmb.gov.tr, checked 2026-09-28). If you can, price in USD or EUR and pay to the contractor’s foreign-currency account. If the contractor wants lira, Wise sends it to a Turkish IBAN; Payoneer charges 1.2–4% to withdraw in a different currency (payoneer.com, checked 2026-09-28).

4. How much do you pay per month? Platforms charge a percentage of each payout, a monthly seat or a flat fee per payout. At 3%, a percentage fee equals a $29 seat at about $967 a month and a $49 seat at about $1,633. Below roughly $1,000 a month a percentage fee is cheaper; above about $1,600 a seat costs less; on large invoices a flat fee per payout wins. Add the lira side: a contractor converting at a bank or on Payoneer loses a spread on every conversion, so a USD payout that stays in dollars saves the contractor that cost.

5. Is the contractor a relocated foreign national? A residence permit does not give a foreigner the right to work; working on one’s own account needs an independent work permit (csgb.gov.tr, checked 2026-09-28). Russian relocants also meet stricter bank checks since Executive Order 14114 exposed foreign banks to US secondary sanctions (gibsondunn.com, checked 2026-09-28). If the contractor holds a Turkish tax registration and banks in Turkey, pay their own account against their receipt. If they actually live in Russia, see paying contractors in Russia.

Rule of thumb. One contractor with several clients who issues e-SMM receipts in dollars: SWIFT to their foreign-currency account, or a percentage-fee platform that pays to a Turkish bank. A team, or you want contracts and documents with every payment: a contractor platform with a document flow. One client, full-time, fixed hours: a Contractor of Record. Compare the full field in the contractor payouts rating.

Payout rails that work in Turkey in 2026

Two rails that work elsewhere do not work here. PayPal stopped operating in Turkey in June 2016; Turkish account holders cannot send, receive or withdraw (paypal.com, checked 2026-09-28). And a contractor based in Türkiye cannot receive money into a Wise account: since 31 May 2023 Wise account details for Turkish residents stopped working (wise.com, checked 2026-09-28). Wise works only from your side, as a sender of lira.

What the contractor needs to get paid

Two forms cover most IT contractors. A self-employed professional (serbest meslek) registers with a tax office and issues an electronic self-employment receipt (e-SMM), mandatory under VUK General Communiqué 509 since 1 June 2020 (muhasebenews.com, checked 2026-09-28). A sole proprietorship (şahıs şirketi) earns commercial income and issues an e-Arşiv invoice or e-Fatura instead (ilkkod.com, checked 2026-09-28).

For a foreign client, the e-SMM names you and your country, shows the currency amount and its lira value at the central bank rate (musavirlerkulubu.com.tr, checked 2026-09-28), and carries no VAT: services for a customer abroad and used abroad are exempt under Articles 11/1-a and 12/2 of the VAT Law (muhasebenews.com, checked 2026-09-28).

The contractor pays:

• income tax at 15–40%; the 2026 brackets for non-wage income end at TRY 190,000, 400,000, 1,000,000 and 5,300,000 (alomaliye.com, checked 2026-09-28), with the 100% service-export deduction on qualifying income;
• Bağ-Kur social security, at least TRY 11,808.23 a month in 2026 (cottgroup.com, checked 2026-09-28).

A contractor who registered before turning 29 can also exempt up to TRY 400,000 a year for three years under the young entrepreneur rule; the one-year Bağ-Kur support that came with it ended on 1 January 2026 (vergiselboyut.com, checked 2026-09-28). Classification, IP assignment and the work-permit question for foreigners are in our hiring guide.

Documents and tax on the payer’s side

Withholding. None. A foreign client is not a Turkish withholding agent; the contractor declares the income in their annual return (muhasebetr.com, checked 2026-09-28).

US payers. Collect Form W-8BEN. The US and Turkey have an income tax treaty from 1996 (irs.gov, checked 2026-09-28), but pay for services is sourced where the work is done, so work performed in Turkey is foreign-source income (irs.gov, checked 2026-09-28) and needs no Form 1099-NEC.

What to keep on file:

• the signed services contract, with currency, payment schedule and a description of how the contractor works (own hours, own equipment, other clients);
• the e-SMM receipts or invoices issued in your company’s name;
• payment confirmations with the SWIFT reference;
• the W-8BEN, if you are a US payer.

On a platform or Contractor of Record model, you keep the platform’s invoice to you, and the platform holds the contract and receipts with the contractor.

Where it breaks

• The deduction is lost on the way. The 100% deduction needs the invoice in the foreign customer’s name and the full amount in Turkey by the annual return deadline (aliozansahin.com, checked 2026-09-28). A payout left on a foreign wallet past March, or an e-SMM that does not name the foreign customer, undoes it. Tell the contractor which entity to invoice before the first payment.
• A lira transfer bounces. Turkish banks reject payments to savings accounts, and Wise limits payments into Akbank accounts to three a day (wise.com, checked 2026-09-28). Ask for a current-account IBAN.
• Less money arrives than you sent. On SHA or BEN wires, intermediary and receiving banks take their fees from the amount. If the contractor then converts to lira at the bank, they lose the bank’s spread on top. Agree in the contract who pays wire fees.
• A lira-denominated contract erodes. With annual inflation at 31.51% in August 2026 (tradingeconomics.com, checked 2026-09-28), a rate fixed in lira falls in real terms every month. Price in USD or EUR, or write in an indexation clause.
• Russia-linked scrutiny. After Executive Order 14114, Turkish banks closed accounts of Russian companies and suspended some payments from them (meduza.io, checked 2026-09-28). A payment to a relocated Russian developer can draw questions about purpose; answer with the contract and receipt. Do not route payments through a third person’s account.
• The marketplace habit. Clients used to paying freelancers by PayPal find the payment fails: Turkish PayPal accounts cannot receive (paypal.com, checked 2026-09-28).