What Is the Penalty for Employing Uninsured Workers?

2026 penalty amounts and financial liabilities that employers may face

For an employee determined through an inspection to have been employed without insurance in 2026, an administrative fine of 66,060 TL is applied as a rule solely for failing to submit the statement of employment. If the employee’s monthly services and earnings are also unreported, an additional penalty arises. Unpaid premiums, late payment charges, and the loss of incentives can further increase the total cost.

Therefore, for an accurate calculation, the number of employees, the months worked without insurance, the employer’s bookkeeping obligation, and how the violation was detected must be examined together. The amounts below have been calculated based on the 2026 monthly gross minimum wage of 33,030 TL. For acts belonging to previous years, as a rule, the minimum wage in effect on the date the act was committed is taken into account. [1, 2]

Penalty for failing to submit the statement of employment

Article 102/1-a of the Social Insurance and Universal Health Insurance Law No. 5510 stipulates different sanctions for violations regarding the statement of employment. A distinction must be made between the general rule, detection as a result of an inspection, and cases of recurrence. [2]

Nature of the violation	Penalty per employee	2026 amount
Failure to submit the statement within the statutory period — general rule	1 gross minimum wage	33,030 TL
Detection of undeclared employment through an inspection, court decision, or official information and documents specified in the law	2 gross minimum wages	66,060 TL
Fulfillment of the one-year recurrence conditions set forth in the law	5 gross minimum wages	165,150 TL

These amounts are not added cumulatively for the same statement of employment violation. For instance, in an incident where a twofold penalty applies, an additional single penalty is not calculated. However, because the penalty regarding the statement of employment and the penalty for failing to report monthly services arise from different obligations, they may be applied concurrently.

Is the fivefold penalty applied in every inspection?

For the fivefold penalty to apply, the recurrence conditions in sub-clause 102/1-a-3 must be met. Having undergone multiple inspections at the workplace is not sufficient on its own. The dates of the initial and subsequent violations, the source of the detection, and the previous sanction must be examined. In its decision dated 29.09.2021 (Docket No. 2019/4888, Decision No. 2021/4408), the 10th Chamber of the Council of State (Danıştay) required that the same violation occur again after the previous penalty was imposed and officially served. For this reason, previous penalty and service of notice documents are of key importance when reviewing a fivefold penalty calculation. [3]

Penalty for failing to report monthly services and earnings

The financial consequence of uninsured employment is not limited to the statement of employment. If it is determined through an inspection that the employee’s services and earnings were not declared in the withholding and premium service return (muhtasar ve prim hizmet beyannamesi), an additional penalty is imposed pursuant to Article 102/1-m-4 of Law No. 5510. The table below relates to this method of detection; different penalty provisions may apply for returns submitted voluntarily or under other conditions. [4]

Employer’s bookkeeping status	Penalty per employee for the relevant month	Monthly upper limit per workplace
Obliged to keep books on a balance sheet basis	33,030 TL	99,090 TL
Obliged to keep other types of books	16,515 TL	66,060 TL
Not obliged to keep books	11,010 TL	33,030 TL

This penalty is assessed separately for each unreported month. If it is determined that multiple employees were unreported for the same month at the same workplace, the amount calculated based on the number of individuals is compared against the relevant monthly upper limit. Conversely, in the statement of employment penalty, a separate calculation is made for each employee.

How much penalty is incurred if an employee is employed without insurance for three months?

Suppose an inspection determines that an employee worked without insurance for three months in 2026 at a company obliged to keep books on a balance sheet basis. Assume that the statement of employment and the service declarations for these three months were not submitted, the statutory periods for the monthly declarations have expired, and the recurrence conditions requiring a fivefold penalty have not occurred.

Penalty item	Calculation	Amount
Failure to submit the statement of employment	33,030 × 2	66,060 TL
Failure to report three months of services and earnings	33,030 × 3	99,090 TL
Total of these two items	66,060 + 99,090	165,150 TL

The 165,150 TL in this example is the sum of two separate reporting violations. The fact that the amount equals five minimum wages does not mean that a fivefold recurrence penalty was applied in the example. Premium debt, late payment charges, and other sanctions, if any, are not included in this calculation. [1, 2, 4]

Even one day of uninsured employment can result in a penalty

Short-term employment does not eliminate the obligation to submit a statement of employment. If the reporting obligation has arisen and the deadline has passed, even a single day of employment can lead to sanctions. The statement of employment penalty is not prorated by dividing it by the number of days worked. On the other hand, actual working days and earnings subject to premium are taken into account when determining the premium debt. Special exceptions in the law regarding the deadline for the statement of employment should also be checked separately. [2, 5]

What liabilities arise other than the administrative fine?

Premium debt and late payment charges

Insurance premiums belonging to undeclared employment are accrued separately. Statutory late payment penalties and late payment interest apply to overdue premiums. Paying the administrative fine does not absolve the employer of past-period premium debt. The premium calculation must be based on the actual duration of employment and earnings subject to premium. [5]

Loss of incentives and premium discounts

Regarding incentives within the scope of Additional Article 14 of Law No. 5510, when the conditions are met, employers may be barred from benefiting from incentives for one month upon the first detection, and for one year upon repeated detections within three years of the first detection. The exception stipulating that the number of unregistered individuals does not exceed both one percent of the total number of insured employees and five persons in total must also be examined. The scope and specific conditions of each incentive are evaluated separately. [6]

Recovery of minimum wage support

The 2026 support is based on Provisional Article 112 of Law No. 5510. The regulation explicitly states that Additional Article 14 shall not apply. Therefore, the one-month ban or the headcount exception applicable to incentives cannot be directly applied to this support. When the conditions are met, past supports are recovered together with late payment penalties and late payment interest. [7]

Other reporting and record-keeping violations

If there are other violations—such as failing to submit a notice of termination of employment, failing to submit a workplace declaration, or failing to produce requested records—these may also give rise to separate sanctions. These penalties are not automatically added to every detection of uninsured employment; the conditions for each must be established separately. [2]

Can the penalty be paid at a discount?

Pursuant to Article 102 of Law No. 5510, if advance payment is made within 15 days from the service of the penalty notice and prior to filing an objection with the Institution (SGK) or resorting to judicial remedies, three-fourths of the penalty is collected. Thus, a 25 percent discount is provided. Advance payment does not eliminate the right to seek judicial remedies. However, making a payment does not restart the objection period. Special discounts stipulated for declarations made voluntarily and within certain periods should not be confused with employment caught through an inspection. [2]

What should be done when a penalty notice is served?

First, the date of service and the application deadline must be determined; the penalty schedule, inspection report, and individual-based SGK (Social Security Institution) records must be compared. Against an administrative fine, the law provides for an objection to the SGK within 15 days of service of the notice, and a lawsuit before the competent administrative court within 30 days of service of the rejection decision. Regarding premium accrual and the cancellation of incentives, the application procedure and the court of competent jurisdiction must be evaluated separately. [2]

The total cost of employing uninsured workers emerges when the statement of employment penalty, monthly reporting penalties, past premiums, and losses of support are calculated together. For this reason, rather than looking solely at the total figure on the penalty notice, the legal basis and calculation for each individual, act, and period should be checked separately.

Atty. Fatih Mehmet Tercan | October 28, 2026

info@tercanhukuk.com

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