Employment Law
Severance pay in Türkiye: who is entitled, how it is calculated and how to claim it
Translated from the Turkish original. Türkçe aslı →
When an employment relationship ends in Türkiye, the first question is almost always the same: "Am I entitled to severance pay?" The answer usually depends less on how long you worked than on how the employment contract ended. This guide explains who is entitled to severance pay (kıdem tazminatı), how it is calculated and how it is claimed, together with the mistakes we see most often in practice.
What is severance pay?
Severance pay is a lump sum owed to an employee, in the situations listed by law, when the employment contract ends - in return for the time spent working for the same employer. Its legal basis is still Article 14 of the former Labour Law No. 1475. The current Labour Law No. 4857, in force since 2003, kept that article alive until a severance fund is created; as the fund was never established, severance pay is still calculated under the old provision.
Severance pay is not a favour but a statutory entitlement. An employer cannot remove it by "company policy" or by having the employee sign a document.
First condition: at least one year of service
The employee must have worked for the same employer for at least one full year. When counting this period:
- Time spent at different workplaces of the same employer is added together.
- If the service was interrupted, earlier periods for which no severance was paid are combined.
- Where a business is transferred, service before the transfer counts; the new employer cannot ignore it.
- Social security (SGK) records are important evidence, but if the actual service was longer than the records show, this can be proved with witnesses and documents.
The decisive question: how did the contract end?
Most disputes arise here. The table below shows the most common ways a contract ends and the consequences for severance pay.
| How the contract ended | Severance pay | Comment |
|---|---|---|
| Dismissal by the employer on valid grounds or without grounds | Yes | Performance, downsizing or restructuring fall into this category. |
| Dismissal for just cause because the employee breached the rules of morality and good faith | No | Article 25/II of Law No. 4857. The employer must prove the allegation. |
| Dismissal for health reasons, force majeure, or custody or detention of the employee | Yes | The law excludes only breaches of morality and good faith. |
| Resignation by the employee for just cause | Yes | For example unpaid wages, underpaid social security premiums, workplace bullying or health reasons. |
| Resignation without just cause | No | But the court looks at whether the resignation was in fact based on a just cause. |
| Compulsory military service | Yes | You need to document that you left for military service. |
| Retirement, or meeting all retirement conditions other than age | Yes | Leaving with a letter from the SGK confirming this is covered. |
| A female employee leaving within one year of marriage | Yes | The one-year window must not be missed. |
| Death of the employee | Yes | Paid to the statutory heirs. |
| A fixed-term contract expiring at the end of its term | As a rule, no | This is the settled view of the Court of Cassation's General Assembly; chains of fixed-term contracts may be treated as indefinite. |
| Termination by mutual agreement | It depends | The Court of Cassation requires a reasonable benefit for the employee where the employer proposes the agreement; this usually includes severance and notice pay. |
Resigning for just cause: protecting your entitlement
If an employee terminates the contract on one of the just causes listed in Article 24 of Law No. 4857, they are entitled to severance pay even though they resigned. The most common just causes in practice are:
- Wages, overtime or other payments not being paid in full and on time,
- Social security premiums being paid on less than the real wage, for example on the minimum wage,
- Workplace bullying (mobbing), insults or sexual harassment,
- Working conditions being changed substantially to the employee's detriment,
- The work becoming dangerous to the employee's health.
The termination notice must state these reasons clearly and specifically. Wording such as "I am leaving of my own accord" makes it very difficult to prove a just cause later. For terminations based on breaches of morality and good faith, the law requires the right to be exercised within six working days of learning of the reason; for continuing breaches such as unpaid wages, however, that period is accepted not to run while the breach continues.
How is the amount calculated?
Severance pay is thirty days' gross wages for each full year of service; any additional months and days are added pro rata.
Gross wage including benefits
The calculation uses not only the base salary on the payslip but also money and benefits in kind provided regularly to the employee. This is often called the "dressed" gross wage. For example:
- Transport and meal allowances (in cash or as meal cards),
- Regular bonuses and premiums (the annual amount divided by twelve),
- Heating, clothing and similar regular allowances.
Overtime pay, one-off payments and benefits provided for the job itself, such as a company car used for work, are generally not included. The wage used is the last wage at the date the contract ended.
The severance pay ceiling
The amount payable for one full year cannot exceed the retirement bonus paid to the highest-ranking civil servant. The ceiling is updated twice a year, in January and July; the ceiling in force on the date the contract ends applies.
Two worked examples
Example 1 - wage below the ceiling. An employee earning a gross wage including benefits of TRY 40,000 is dismissed in September 2026 after 6 years, 3 months and 10 days of service:
| Item | Calculation | Amount |
|---|---|---|
| 6 full years | TRY 40,000 x 6 | TRY 240,000.00 |
| 3 months | TRY 40,000 x 3 / 12 | TRY 10,000.00 |
| 10 days | TRY 40,000 x 10 / 365 | TRY 1,095.89 |
| Gross severance pay | TRY 251,095.89 | |
| Stamp duty (7.59 per mille) | -TRY 1,905.82 | |
| Net amount payable | TRY 249,190.07 |
Example 2 - wage above the ceiling. A manager earning a gross wage including benefits of TRY 90,000 leaves in October 2026 after exactly 4 years. Because the wage exceeds the ceiling, the calculation uses the ceiling rather than TRY 90,000: TRY 73,729.87 x 4 = TRY 294,919.48 gross. After stamp duty, the net amount is TRY 292,681.04. Without the ceiling it would have been TRY 360,000.
When it must be paid, and late-payment interest
Severance pay falls due the moment the employment contract ends; it must be paid immediately. If the employer pays late, interest at the highest rate applied to deposits runs for the delay. Payment in instalments is possible only with the employee's express agreement.
Mediation first, then the lawsuit
Under the Labour Courts Law No. 7036, applying to a mediation office is a precondition for a lawsuit concerning employee claims such as severance pay. A lawsuit filed without this step is dismissed on procedural grounds.
From mediation to the labour court
- Gather your documentsThe employment contract, payslips, bank statements, SGK service record, termination notice and correspondence.
- Calculate the claimAssess notice pay, unused annual leave, overtime and other claims together with severance pay.
- Apply to the mediation officeThe application is free of charge and is made to the office where the other party is domiciled or where the work was performed.
- Attend the meetingsThe mediator normally concludes the process within three weeks; in compelling cases this can be extended by one week.
- Agreement or final reportAn agreement can be enforced like a court judgment. If there is no agreement, the lawsuit is filed before the labour court on the basis of the final mediation report.
The limitation period is suspended from the date of the mediation application until the final report is issued. Law No. 7589, in force since 31 July 2026, abolished the "undetermined claim" action (Article 107 of the Code of Civil Procedure); for lawsuits filed after that date, how the claim is pleaded and increased during the proceedings needs to be planned under the new rules from the outset.
Limitation period: five years
A severance pay claim becomes time-barred five years after the employment contract ends. This period applies to contracts that ended after 25 October 2017.
Common mistakes
Frequently asked questions
Can an employee who resigns receive severance pay?
Not if the resignation is without just cause. But if the resignation is based on a just cause, such as unpaid wages or underpaid premiums, and the reason is clearly stated in the notice, severance pay is payable. Leaving for retirement, military service or marriage also gives rise to severance pay.
Can I leave with an SGK letter before I actually retire?
Yes. An employee who has met all retirement conditions other than age (insurance period and premium days) can obtain a letter from the SGK confirming this, leave the job and claim severance pay.
Is income tax deducted from severance pay?
No. Severance pay up to the ceiling is exempt from income tax; only stamp duty of 7.59 per mille is deducted.
Who pays my severance if the business is transferred?
The transferee employer is liable for the employee's entire service. The transferor is jointly liable, limited to the period worked for it and the wage level at the date of transfer.
Can severance pay be paid in instalments?
Only if the employee expressly agrees. Otherwise the full amount falls due on the date the contract ends, and interest at the highest deposit rate runs for any delay.
Legislation and sources
- Former Labour Law No. 1475: Art. 14 (severance pay)
- Labour Law No. 4857: Arts. 17, 24, 25 and Additional Art. 3
- Labour Courts Law No. 7036: Art. 3 (mandatory mediation)
- Code of Obligations No. 6098: Art. 420 (releases)
- Income Tax Law No. 193: Art. 25 (severance exemption)
- Stamp Duty Law No. 488: tariff for wage payments
- Law No. 7589 (12th Judicial Package), Official Gazette 31.07.2026: repeal of Art. 107 of the Code of Civil Procedure
The current texts of Turkish laws and regulations are available on the official Legislation Information System, and decisions and amendments in the Official Gazette.
If you would like us to review a severance, notice pay or other employee claim, please contact us. For related topics, see our Employment Law page.
This article is for general information only and does not constitute legal advice. It reflects the law as at the date of publication; please consult a lawyer about your specific situation.
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