Automatic Participation to Compulsory Individual Pension System About to Cover Heaps of Companies


Since 1 Jan 2017, Turkish employees are subject to Compulsory Individual Pension System ("OtoBES") if they were working at a company with more than 1000 employees.

The scope has expanded gradually by decreasing the threshold, now companies with only 5 employees will be in the scope as of 1 Jan 2019!

Where to refer to determine the number of employees? If you had 5 employees in November 2018, you are in the scope! And at any point in the future, when you reach 5 employees, you will be in the scope...

Who is responsible?

I have referred "you" above which means the employer!

The companies are requested to make an agreement with an insurance company, withheld the contribution amount of the employees and pay those to insurance companies on employees behalf.

Who is in the scope? 1. Employees younger than 45 years young! 2. Turkish citizens and blue card holders

How much will be the cuts? 3% of the gross salary must be withheld and paid to Insurance Company

When will the payments would made? 1 day after the salary payment. If you pay the salaries on last of the month, you must pay on the first day of the following month to the insurance company!

What would happen if employers will not comply with the regulation? There will be a TRY 100 penalty for each employee/month.

What happens if your employees do not want to participate to this system? Firstly, it is compulsory, they must participate. However, they can leave the system in two months for free.

No fees would be claimed by the insurance company during that period if they leave.

Salary Payments

Just a gentle reminder that companies having 5 and more employees MUST

1. Pay the salaries through bank

2. Pay the salaries in Turkish Lira

Please contact us if you need any further clearance.

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