Severance pay (kıdem tazminatı) is paid to an employee in return for the time spent working for the same employer when the employment contract ends in one of the ways listed by law. It is still governed by Article 14 of the former Labour Law No. 1475.
Basic requirements
The employee must have worked for the same employer for at least one year. In addition, the contract must have ended in one of the following ways.
- Termination by the employer: The employer terminates the contract other than for just causes such as breach of good faith and moral rules.
- Termination by the employee for just cause: The employee terminates for just causes such as unpaid wages, unpaid overtime or mobbing.
- Military service: Leaving work to perform compulsory military service.
- Retirement: Leaving to receive an old-age pension, or after completing the retirement requirements other than age (insurance period and premium days).
- Marriage: A female employee leaving voluntarily within one year of the date of marriage.
- Death: If the employee dies, severance pay is paid to the heirs.
How is it calculated?
For each full year of service, the employee receives 30 days' pay based on the last gross wage including regular benefits; periods exceeding a full year are calculated pro rata. Regular payments such as transport, meals and recurring bonuses are added to the base wage. The annual amount cannot exceed the severance pay ceiling, which is updated twice a year. Only stamp duty is deducted from severance pay.
Deadlines and procedure
For employment contracts that ended after 25 October 2017, the limitation period for severance pay is five years. Applying to a mediator before filing a lawsuit is mandatory; if no agreement is reached in mediation, a lawsuit may be filed at the labour court. Unpaid severance pay bears the highest interest rate applied by banks to deposits from the date of termination.
This article is for general information only; we recommend consulting a lawyer about your specific situation.