Severance and notice pay

How is severance pay calculated?

An employee who has worked for the same employer for at least one year is entitled to severance pay (kıdem tazminatı) equal to 30 days’ full gross wage for each full year of service, with a pro rata payment for any remaining part of a year (former Labour Code art. 14; only this article on severance pay is still in force). The full wage (giydirilmiş ücret) is the basic wage plus regular payments such as meals, transport, bonuses and premiums. One year’s severance pay cannot exceed the severance pay capin force on the termination date. Only stamp duty is deducted from severance pay.

Notice pay (ihbar tazminatı) is paid by the party that terminates an indefinite-term contract without observing the notice period. The notice period is 2, 4, 6 or 8 weeks depending on length of service (Labour Code (İş K.) art. 17). Income tax and stamp duty are deducted from notice pay.

Severance pay cap

As a rule, an employee who resigns does not receive severance pay; however, an employee who terminates for just cause, such as unpaid wages, mobbing or being employed without social security registration, does receive it. You can review the just causes in the termination for just cause tool.