How Is Severance Pay Calculated in Turkey? (With Worked Example)
Severance pay is calculated on the basis of 30 days of 'dressed' gross wages for each full year of service. Transportation, meal allowances, and regular bonuses are included in the calculation; only stamp duty is deducted.
Severance pay is the employee's most important claim, and its calculation is more technical than commonly assumed. Never sign a severance pay offer that appears understated without having it checked first.
Who Is Entitled to Severance Pay?
An employee who has worked for the same employer for at least 1 year becomes entitled to severance pay if the employment contract ends in one of the following ways:
- Termination by the employer without just cause (dismissal)
- Termination by the employee for just cause (unpaid wages, uninsured employment, mobbing, etc.)
- Termination due to military service
- Termination by a female employee within 1 year of the date of her marriage
- Retirement, or completion of the conditions for retirement other than age (including the EYT [early retirement without an age limit] scope)
- Death of the employee (the compensation is paid to the heirs)
As a rule, an employee who resigns is not entitled to severance pay; however, this changes if there is just cause behind the resignation. Obtain legal advice before signing a letter of resignation.
The Calculation Formula
Severance pay = Dressed daily gross wage × 30 × years worked
Periods exceeding a full year are calculated proportionally. The dressed wage includes:
- Bare gross wage
- Regular transportation and meal allowances
- Regular bonuses and premiums
- Continuous benefits such as heating and clothing allowances
Worked Example
| Item | Amount |
|---|---|
| Gross salary | TRY 40,000 |
| Monthly transportation allowance | TRY 2,000 |
| Monthly meal allowance | TRY 3,000 |
| Dressed monthly gross wage | TRY 45,000 |
| Length of service | 6 years, 6 months |
| Calculation | 45,000 × 6.5 |
| Gross severance pay | TRY 292,500 |
Only stamp duty (7.59 per thousand) is deducted from this amount. Severance pay is subject to a ceiling; the ceiling amount is updated every January and July — be sure to check the current ceiling before calculating.
What to Do if Severance Pay Is Not Paid
- A written demand (notice letter) may first be sent to the employer.
- A mandatory mediation application must be filed — this is a prerequisite for filing a labor-claims lawsuit.
- If no agreement is reached, a lawsuit is filed with the labor court; interest applies at the highest rate applied to bank deposits from the date of termination.
Summary
- Condition: at least 1 year of service + a type of termination that gives rise to severance pay
- Formula: dressed gross wage × 30 days × years
- Deduction: only stamp duty
- Limitation period: 5 years
- Path in a dispute: notice letter → mediation → labor court
Sources
- Labor Law No. 1475, Art. 14 — Severance pay
- Labor Law No. 4857
- Labor Courts Law No. 7036 — Mandatory mediation
Frequently Asked Questions
This article has been prepared for general information purposes only and does not constitute legal advice. Legislation and case law may change; always consult a lawyer about your specific case.