Severance and notice pay in Turkey: who is entitled and how it is calculated

The short answer

Severance pay is owed to an employee who has worked for the same employer for at least one year when the contract ends for one of the reasons listed in the law. It equals 30 days of “gross pay including regular benefits” (giydirilmiş brüt ücret) for each full year, with partial years added pro rata. The legal basis is still Article 14 of the old Labour Law No. 1475, which was kept in force.

Notice pay is owed by the party that ends an open-ended (indefinite-term) contract without respecting the notice periods in Article 17 of Labour Law No. 4857. Employees usually claim it, but an employee who walks out without giving notice may owe it to the employer.

For both claims, mediation is mandatory before a lawsuit, and the limitation period is five years.

Who is entitled to severance pay?

Three conditions apply together: the employee is covered by the Labour Law, has worked for the same employer (including different workplaces of that employer) for at least one year, and the contract ended in one of the ways the law lists. Separate periods with the same employer are added together, and service before a transfer of the business also counts.

• Dismissal by the employer: severance is owed unless the dismissal is for the employee's misconduct under Article 25/II (breach of good faith and morals). Performance, downsizing or economic reasons do not remove the right.
• Resignation for just cause (Article 24): unpaid wages or overtime, under-reported social security premiums, workplace bullying (mobbing) or health reasons allow the employee to terminate immediately and claim severance.
• Compulsory military service.
• Retirement: leaving to receive an old-age, retirement or disability pension or a lump-sum payment.
• Meeting all retirement conditions except age: an employee who has completed the required insurance period and premium days may resign voluntarily and still receive severance.
• Marriage: a female employee who resigns within one year of her marriage.
• Death of the employee: severance is paid to the legal heirs.

Can you resign and still get severance pay?

An ordinary resignation without one of these reasons does not give rise to severance. But if one of the reasons above exists, the fact that the letter says “resignation” does not by itself cancel the right; what matters is the real reason and whether it can be proven. In practice the most common grounds are unpaid overtime, late or partial wages and social security premiums reported on the minimum wage. State the reason clearly in writing, ideally through a notary notice (ihtarname). If you are leaving on retirement grounds, first obtain the “may receive severance” letter from the Social Security Institution (SGK) and give it to your employer.

Before signing a resignation letter, put your real reason in writing. A pre-printed “I am leaving of my own free will” form prepared by the employer can make a just-cause claim much harder to prove.

How is severance pay calculated?

The calculation uses the employee's last wage, but not the bare salary: it uses gross pay plus the monetary value of regular benefits such as meal and transport allowances, regular bonuses and premiums. Irregular payments such as overtime are generally left out.

1. Take the last monthly gross wage and add the monthly value of regular benefits.
2. Compare it with the ceiling; if it is higher, the ceiling applies.
3. Multiply by the number of full years and add the months and days pro rata.
4. Only stamp duty is deducted; severance pay is exempt from income tax and social security premiums.

Where to check the severance ceiling

The amount paid for one year of service cannot exceed the maximum retirement bonus paid to the highest-ranking civil servant for one year. Because it is tied to civil servant salary coefficients, the ceiling is updated twice a year, in January and July. We do not quote a figure here; check the ceiling in force on your termination date in the Ministry of Treasury and Finance coefficient circular or announcements of the Ministry of Labour and Social Security.

What is notice pay and who can claim it?

A party ending an open-ended contract must notify the other side and wait for the statutory period. If the employer dismisses the employee without notice and without paying the notice-period wages in advance, the employee can claim notice pay. During the notice period the employer must also give at least two hours of paid job-seeking leave per day (Article 27).

Notice pay is generally not owed when a fixed-term contract expires, when either party terminates immediately for just cause, when the employee leaves for retirement, military service or marriage, or during the probation period. An employee who resigns without serving notice may have to pay notice compensation to the employer.

Notice periods under Article 17

These are minimums and may be extended by contract or collective agreement. The period runs from the day the notice reaches the other party.

How notice pay is calculated: gross or net?

Notice pay equals the notice period in weeks × 7 × the daily gross pay including regular benefits. Unlike severance, there is no ceiling. Income tax and stamp duty are deducted from notice pay, but no social security premium, so the net amount can be lower than a severance payment of the same gross size.

Mandatory mediation before a lawsuit

Under Article 3 of Labour Courts Law No. 7036, an application to a mediator is a precondition for suing for severance, notice pay, overtime, annual leave pay or reinstatement. You apply to the mediation office of the courthouse where the employer is based or where the work was done; for workplaces in Üsküdar, Kadıköy, Ataşehir and nearby districts this is usually the Istanbul Anatolian Courthouse.

1. The mediation office appoints a mediator, who invites both parties.
2. The process must be completed within three weeks of the appointment, extendable by one week where necessary.
3. A settlement signed at mediation is enforceable like a court judgment.
4. If there is no settlement, the employee sues in the labour court with the final mediation report. Where the exact amount is unclear, the case is often filed as a claim for an undetermined amount and the figure is fixed after an expert calculation.

A party that skips the first meeting without a valid excuse is ordered to bear half of the other side's court costs even if it later wins. For how legal fees and court costs are set, see our guide to attorney fees.

Limitation period and interest

Severance pay, notice pay, bad-faith compensation and annual leave pay are subject to a five-year limitation period (Labour Law Additional Article 3), running from the end of the contract. Time does not run while the mediation is pending.

If you sue after five years and the employer raises limitation, the claim fails. For contracts that ended before 25 October 2017 a different period may apply, so check the dates.

Late severance pay carries the highest interest rate applied by banks to deposits, generally from the termination date. Notice pay normally carries statutory interest from the date the employer was put in default (for example by a notary notice or the mediation application), or otherwise from the filing date.

What to do if you have been dismissed

• Keep the termination letter, the SGK exit code and your last payslips.
• Collect bank statements, entry-exit records, messages and emails that show overtime and benefits.
• Note colleagues who could act as witnesses.
• Do not sign a release (ibraname) or a “I have received all my rights” statement without checking what you were actually paid.
• Plan the mediation application with the five-year limit in mind.

Online calculators give a rough idea, but what counts as regular benefits, whether your departure qualifies as just cause and what you can prove depend on the facts. If you would like your situation reviewed with your documents, see our employment and social security law page or reach us through the contact page.