severance pay in Turkey

Severance pay, also known as termination pay, is a significant aspect of employment contracts that provides financial protection to employees when their employment is terminated in Turkey.

The severance pay is regulated by the Turkish Labor Law and serves as a safeguard for employees during times of job loss or termination. This article aims to provide a comprehensive overview of severance pay in Turkey, including the calculation methods, eligibility criteria, and legal obligations for employers.

Eligibility for Severance Pay

In Turkey, the entitlement to severance pay is applicable to employees who work under an employment contract, irrespective of whether it is a fixed-term or indefinite-term contract. Both Turkish citizens and foreign employees are eligible for severance pay, provided they meet the necessary criteria.

Calculation of Severance Pay in Turkey

The calculation of severance pay in Turkey depends on several factors, including the length of service, the employee’s last gross salary, and the reason for termination. The length of service is a crucial factor in determining the amount of severance pay, and it is calculated based on the total duration of employment with the employer.

For each full year of employment, an employee is entitled to a severance pay equivalent to 30 days’ salary. In cases where the employment duration is less than one year, the payment is pro-rated based on the actual number of days worked. Furthermore, any remaining period less than a year is rounded up to the nearest month.

The calculation of severance pay also considers the last gross salary of the employee. Gross salary includes regular salary, bonuses, and other periodic payments. However, certain payments, such as overtime, premiums, and allowances that are not regular or continuous, are excluded from the calculation.

Reasons for Termination and Severance Pay

In Turkey, employees are entitled to severance pay under various circumstances, including:

Termination by the Employer:

a. Termination due to health reasons

b. Termination for business-related reasons (restructuring, liquidation, etc.)

c. Termination due to the employee’s incompetence or misconduct (subject to certain conditions)

Termination by the Employee:

a. Resignation due to health reasons

b. Resignation due to a compelling reason (subject to certain conditions)

c. Resignation by female employees due to marriage or birth (subject to certain conditions)

Legal Obligations for Employers

Employers in Turkey are legally obligated to fulfill certain requirements when it comes to severance pay. They must pay the severance amount to the employee within ten business days following the termination of employment. Failure to comply with this requirement can result in additional penalties for the employer.

Additionally, employers are required to provide a severance pay notice to employees upon termination. The notice should include the calculation details, the method used to determine the severance amount, and any deductions made from the gross salary.

Taxation and Exemptions

Severance pay in Turkey is subject to income tax; however, there are certain exemptions based on the length of service and the reason for termination. If the employment duration is less than one year or the termination is due to the employee’s death, retirement, or disability, the severance pay is exempt from income tax.


Severance pay plays a crucial role in safeguarding employees’ financial stability during periods of job loss or termination. In Turkey, the Turkish Labor Law ensures that employees are entitled to severance pay based on their length of service and last gross salary. Employers have legal obligations to fulfill, including the timely payment of severance and providing proper documentation to employees.

Understanding the intricacies of severance pay is essential for both employees and employers in Turkey. By familiarizing themselves with the regulations and obligations, both parties can navigate the termination process with clarity and fairness, promoting a positive work environment and protecting the rights of employees.



Comments are closed

Similar Posts

SSI Turkey 2
What do you need to know about last SSI directive in Turkey […]
esg turkey
In Turkey, Environmental, Social, and Corporate Governance (ESG) considerations are increasingly gaining […]
data protection law turkey
The Data Protection Law establishes guidelines that align with constitutional principles safeguarding […]
foreign investment turkey
Foreign investment in Turkey is subject to a well-defined legal framework and […]
foreign investments turkey
Foreign investments play a pivotal role in shaping the economic landscape of […]
corporate structures turkey 2
Legal landscape of Turkey offers a variety of corporate structures to both […]