Severance pay calculator Türkiye and notice pay calculator Türkiye

How is severance pay calculated in Türkiye?

Severance pay is 30 days’ pay for each full year of service from the start of employment, and periods beyond a full year are paid at the same rate (Labour Law No. 1475 art. 14). Labour Law No. 4857 repealed the rest of Law No. 1475 but kept article 14 in force (art. 120). The formula is therefore: annual base × full years + annual base × months ÷ 12 + annual base × days ÷ 365. The month and day fractions are not written as numbers in the law; they are the established way of applying “the same rate”, and the tool uses them.

For a monthly-paid employee, 30 days’ pay is the gross monthly pay including regular benefits. The tool counts the period on the calendar: full years first, then full months, then remaining days. The end date itself is not added; the difference between the two dates is measured.

Example: gross monthly pay including benefits of ₺40,000, assumed to be below that period’s ceiling. The figures only illustrate the calculation.

Which pay is used: gross pay including benefits

The calculation uses the last pay. Besides the basic wage, cash and cash-measurable contractual and statutory benefits provided to the employee are included (Law No. 1475 art. 14). In practice this total is called the “dressed” gross pay: the monthly value of regularly paid meal, transport or bonus payments. Enter them in the separate field; the tool adds the two.

Where pay is not fixed — piece-rate, lump-sum or percentage pay — the average found by dividing the pay of the last year by the days worked in that year is used. If there was a pay rise within the last year, the average is taken from the date of the rise to the leaving date (Law No. 1475 art. 14). In that case enter the 30-day equivalent of that average.

• Enter gross. Severance pay is calculated from gross pay; entering net pay gives too low a result.
• Separate irregular payments. Only continuous, regular benefits are added; check with your accountant whether a one-off payment counts.
• All periods with the same employer count. Service is calculated by adding the periods worked at one or more workplaces of the same employer, including on a transfer of the business (Law No. 1475 art. 14).

The severance pay ceiling

The annual amount of severance pay may not exceed the maximum retirement bonus payable for one year of service to the highest-ranking civil servant (Law No. 1475 art. 14). Because this amount follows civil servant pay, it changes from period to period; the current figure is announced by the Ministry of Treasury and Finance. Enter the amount for the period in which the contract ended.

We do not write a fixed ceiling on this page: the amount changes every period and a stale figure silently produces a wrong result. The ceiling field therefore starts empty. If you fill it in, the tool uses the lower of the pay and the ceiling; if you leave it blank, the result says the ceiling was not checked. If the pay is above the ceiling, the real amount is lower than the tool’s result.

An employment contract or collective agreement may provide more than 30 days’ pay per year; the annual amount set that way may not exceed the ceiling either (Law No. 1475 art. 14).

Who is entitled to severance pay?

Severance pay does not arise on every departure; the contract must end for one of the reasons listed in Law No. 1475 art. 14. Since payment is provided “for each full year”, at least one full year of service is required; for shorter service the tool calculates no severance pay and only shows the notice period. The reasons listed in the law:

• Termination by the employer — except termination for breach of morality and good faith under Law No. 4857 art. 25/II (the reference is deemed made to art. 25 under Law No. 4857 provisional art. 1).
• Termination by the employee for just cause under Law No. 4857 art. 24.
• Leaving for compulsory military service.
• Leaving to receive an old-age, retirement or disability pension or a lump sum; leaving voluntarily after completing the insurance period and premium days required other than age.
• A woman leaving voluntarily within one year of her marriage.
• Death of the employee — the amount is paid to the legal heirs.

This list is not a decision tree: which reason applies often depends on the facts, and in a dispute the court decides. The tool shows the amount assuming entitlement exists. For termination under art. 25/II such as absenteeism and the record-keeping it requires, see the absenteeism records guide.

Notice pay calculator: notice periods

The party ending an open-ended employment contract must notify the other side in advance. The notice period is 2, 4, 6 or 8 weeks depending on length of service (Law No. 4857 art. 17). A party that does not observe it pays notice pay equal to the pay for the notice period. The periods are minimums and may be extended by contract.

Source: Law No. 4857 art. 17. The tool places exactly 1.5 and exactly 3 years in the lower band, following the word “up to” (“kadar”) in the law; if you are on a boundary, check with your accountant.

Benefits on top of the basic wage are also included in notice pay (Law No. 4857 art. 17). Daily pay is the monthly pay including benefits divided by 30 (established payroll practice). Example: gross monthly pay with benefits ₺40,000, service 6 years 7 months → 8 weeks = 56 days; 40,000 ÷ 30 × 56 = ₺74,666.67 gross notice pay. Unlike severance pay, notice pay has no ceiling.

The employer may end the contract immediately by paying the notice period’s wages in advance (Law No. 4857 art. 17). If the contract ended after the notice period was served, no notice pay arises. Annual leave cannot be used inside the notice period; the two may not overlap (Law No. 4857 art. 59).

Deductions: stamp tax and income tax

The Income Tax Law exempts the whole of the severance pay due under Labour Law No. 1475 from income tax (Income Tax Law No. 193 art. 25/7-a). Table (1) annexed to the Stamp Tax Law, paragraph IV-1-b, levies 7.59 per mille stamp tax on receipts for money received for services, including compensation (Stamp Tax Law No. 488). The tool therefore deducts only stamp tax from severance pay.

Notice pay is not listed in that income tax exemption. The tool shows stamp tax on notice pay but does not calculate income tax: the tax base and bracket depend on payroll and on that year’s cumulative earnings. Ask your accountant how contractual payments above the statutory amount are taxed.

Payment, interest and limitation period

If severance pay is not paid on time and a claim is filed, the court awards the highest interest rate applied to deposits for the delay (Law No. 1475 art. 14). The limitation period for severance and notice pay is five years (Law No. 4857 additional art. 3). Severance pay is not paid more than once for the same period of service (Law No. 1475 art. 14): a period already compensated is not counted again.

A correct calculation starts with correct records

Most severance disputes come down to two questions: exactly since when has the employee worked here, and which payments were part of the last pay? Start dates, pay history and regular benefits need consistent records over years; working-time records also underpin claims raised on leaving, such as unpaid overtime. Our workforce management system builds timesheets from clock-ins, locks the approved month and sends it to your accountant as CSV and PDF; see timesheet software. For employee documents, see the personnel file guide.

The calculators are for information only and are not legal or payroll advice. Your collective agreement or employment contract may contain more favourable terms.