Severance Pay Calculator

What is severance pay?

Severance pay is compensation paid by the employer to an employee who has worked for the same employer for at least one year when the employment contract ends under one of the circumstances listed in the law. It is based on Article 14 of Labor Law No. 1475, which remains in force. The employee is paid severance of 30 days' gross wages for each full year of service; any period beyond a full year is calculated proportionally.

Who is entitled to severance pay?

There are two basic requirements for severance pay: having worked for the same employer for at least one year, and the contract ending in one of the following ways:

• The employer terminates the employment contract for a reason other than a breach of morality and good faith rules (Labor Law Art. 25/II),
• The employee terminates the contract for a justified reason (Labor Law Art. 24: non-payment of wages, mobbing, health reasons, etc.),
• Leaving the job due to compulsory military service,
• Leaving due to old age, retirement, or in order to receive a lump-sum payment; leaving after meeting the insurance period and premium-day requirements for retirement, apart from the age requirement,
• A female employee leaving of her own accord within one year of the date of her marriage,
• The employee's death (in which case the compensation is paid to the legal heirs).

As a rule, an employee who resigns without a justified reason cannot receive severance pay. In fixed-term contracts as well, the contract ending upon expiry of its term does not eliminate the right to severance pay if the conditions are met.

How is severance pay calculated?

The calculation is based on the grossed-up gross wage, which is the sum of the employee's final gross wage and the regularly paid cash and cash-measurable benefits (meals, transportation, child and family allowances, recurring bonuses and premiums). This wage cannot exceed the severance pay ceiling in effect on the termination date.

Formula: Severance pay = (Base wage × number of full years) + (Base wage ÷ 12 × remaining months) + (Base wage ÷ 365 × remaining days). Only stamp tax (0.759%) is deducted from the gross amount calculated.

Sample calculation

For an employee who started work on 15.03.2021 and was dismissed on 10.08.2026, with a monthly gross wage of TL 60,000 and regular additional payments of TL 5,000:

• Length of service: 5 years, 4 months, 27 days; grossed-up gross wage: TL 65,000 (taken as is, since it is below the ceiling)
• 5 years × TL 65,000 = TL 325,000.00
• 4 months × (65,000 ÷ 12) = TL 21,666.67
• 27 days × (65,000 ÷ 365) = TL 4,808.22
• Gross severance pay: TL 351,474.89 − stamp tax TL 2,667.69 = net TL 348,807.20

Severance pay ceiling for 2026

Severance pay for each full year cannot exceed the severance pay ceiling. The ceiling is updated every year in January and July based on civil servant salary coefficients, and the ceiling in effect on the termination date applies.

What deductions are made from severance pay?

Severance pay is exempt from income tax and is not subject to social security (SGK) premiums. Only stamp tax at a rate of 0.759% is deducted from the gross amount. As a result, the net amount is very close to the gross amount.

Payment timing, interest, and statute of limitations

Severance pay becomes due when the employment contract ends and must be paid immediately. If it is paid late, the highest interest rate applied to deposits may be claimed for the unpaid period. The severance pay claim is subject to a 5-year statute of limitations from the date the contract ended.

Mediation is mandatory before filing a lawsuit

For claims and compensation demands based on labor law, such as severance pay, it is mandatory to apply to a mediator before filing a lawsuit (Labor Courts Law No. 7036, Art. 3). If no agreement is reached in mediation, a lawsuit may be filed in the labor court. For your other rights during the dismissal process, you can take a look at our guide explaining your rights when you are dismissed and our article on severance and notice pay.