What Changes Are Expected in EoR in Turkey This Year?

In 2025, several economic developments in Turkey have implications for companies utilizing Employer of Record (EoR) services. Understanding these changes is crucial for maintaining compliance and optimizing operations.

Key Economic Changes in 2025

1. Minimum Wage Increase: The Turkish government has implemented a 30% increase in the net monthly minimum wage, raising it to 22,104 Turkish lira (approximately $630.36) for 2025. This adjustment impacts approximately 9 million workers and serves as a benchmark for private sector salaries.

2. Inflation Rate: Annual inflation in Turkey has decreased to 44.38% in December 2024, down from 47.09% in November. The central bank's year-end target aligns with this figure, and further rate cuts are anticipated in response to favorable inflation trends.

3. Exchange Rate Stability: The Turkish lira has remained relatively stable, trading at approximately 35.3850 per U.S. dollar. This stability is crucial for businesses engaged in international transactions and those compensating employees in foreign currencies.

4. Foreign Investment Outlook: The Turkish government has been implementing economic reforms to attract foreign investment. While specific projections for 2025 are not detailed, these reforms aim to create a more favorable investment climate, potentially influencing business operations and opportunities.

Considerations for EoR Clients in 2025

Compliance with Wage Regulations: The significant increase in the minimum wage necessitates adjustments in payroll to ensure compliance. EoR clients must update compensation structures to reflect the new minimum wage standards.

Inflation Impact on Compensation: Despite a decline, the high inflation rate may erode employees' purchasing power. EoR clients should consider this factor when designing competitive compensation packages to attract and retain talent.

Currency Exchange Considerations: While the lira has shown stability, fluctuations can occur. EoR clients dealing with foreign currencies should monitor exchange rates to manage financial planning and budgeting effectively.

Navigating Economic Reforms: Ongoing economic reforms aimed at attracting foreign investment may lead to changes in regulatory and business environments. EoR clients should stay informed about these developments to adapt their strategies accordingly.

In summary, EoR clients operating in Turkey in 2025 should remain vigilant regarding economic indicators and regulatory changes. Proactive adjustments in payroll, benefits, and compliance strategies are essential to navigate the evolving economic landscape effectively.