What is severance pay and how is it calculated?

Severance pay is a type of compensation that may be paid to an employee when an employment relationship ends under certain conditions. In general practice under Turkish labor law, the calculation is based on the employee’s total length of service at the workplace and regular payments classified as gross pay.

In the severance pay calculation process, not only base salary but also certain recurring cash benefits may be taken into account depending on the specifics of the case. In addition to full years, remaining months and days are calculated proportionally; statutory deductions and the ceiling amount may vary under the relevant legislation.

Main factors in the calculation

  • Length of service: The total period worked for the same employer is important.
  • Gross salary and regular extra payments: Items such as transportation, meal allowance, bonuses or similar benefits are examined separately.
  • Reason for leaving the job: The grounds for termination determine whether severance pay rights arise.

Who may be entitled to severance pay?

Eligibility conditions are assessed according to how and why the employment contract ended. In general, severance pay may come into play in cases of termination by the employer, certain justified resignations by the employee, or departures for reasons specifically listed in the law.

However, not every resignation automatically creates a right to severance pay. In cases where the employee leaves voluntarily, it is important to determine whether the reason for leaving falls within one of the legally protected categories; for that reason, each application should be reviewed together with the documents of the specific case.

Common situations that may give rise to the right

  • Termination by the employer and the legal nature of the reason for termination
  • The employee ending the contract for a justified reason
  • Retirement or leaving based on social insurance conditions
  • Family-related or compulsory reasons specifically regulated by law

What should be considered during the application process?

During the leaving a job process, the termination notice, pay slips, employment contract, SGK (Turkey's Social Security Institution) records and, if available, additional payment documents are important. In practice, disputes often focus on the scope of gross pay, how service length is calculated and how the reason for termination is interpreted.

For that reason, it is useful for employees and employers to check the current legislation before taking action and seek expert advice when needed. In particular, official statements and recent court practice should be closely monitored regarding limitation periods, mediation and litigation processes.