Who is entitled
Severance pay is due when the employee has at least one year of service and the contract ends because:
The employer terminates the contract, unless it is for serious misconduct (just cause under the Labour Law).
The employee resigns for just cause, such as unpaid wages or health reasons.
The employee leaves for compulsory military service.
The employee retires or meets the conditions for a pension.
A female employee resigns within one year of marriage.
The employee dies (paid to the heirs).
An ordinary resignation without just cause does not give a right to severance pay.
How it is calculated
Take the last gross monthly pay, including regular benefits such as meal, transport or bonuses paid regularly.
Compare it with the ceiling in force on the termination date; use the lower figure.
Multiply by years of service, counting partial years pro rata.
Deduct stamp tax at 0.759%.
Worked example
An employee with 5 years and 6 months of service earns TRY 60,000 gross per month plus TRY 6,000 regular meal allowance. Assuming the TRY 66,000 total is below the ceiling:
| Step | TRY |
|---|---|
| Monthly pay for severance | 66,000.00 |
| × years of service | × 5.5 |
| Gross severance pay | 363,000.00 |
| Stamp tax (0.759%) | −2,755.17 |
| Net severance pay | 360,244.83 |
If the monthly pay were above the ceiling, the ceiling would be used instead.
Notice pay and other amounts
| Payment | When | Tax treatment |
|---|---|---|
| Severance pay | Termination without just cause, 1+ year of service | Exempt from income tax up to the ceiling; stamp tax applies |
| Notice pay | Employer ends an open-ended contract without serving notice | Taxed like salary |
| Unused annual leave | Always on termination | Taxed like salary |
| Job security compensation | Invalid dismissal in workplaces with 30+ employees | Depends on the court decision |
Minimum notice periods run from 2 weeks (under 6 months' service) to 8 weeks (over 3 years).
Disputes
Before going to the labour court, employees must apply to mandatory mediation. In workplaces with 30 or more employees, an employee with 6+ months' service can challenge a dismissal without valid reason and seek reinstatement or 4–8 months' compensation.
Frequently asked questions
Is severance pay due on a fixed-term contract?
Yes, if the employee has at least one year of service and the contract ends for a qualifying reason.
Do foreign employees get severance pay?
Yes. The Labour Law applies to employees working in Türkiye regardless of nationality.
Should employers set aside a reserve?
Many do, and larger companies must recognise a provision in their financial statements under TFRS.
Planning a restructuring or termination?
Our Payroll and Legal teams calculate the exact amounts and manage the process.
This page provides general information and is not legal or tax advice. Every situation is different; talk to us before you act.