How to calculate severance pay in Turkey: 2026 ceiling and a worked example
How Turkish severance pay is calculated: 30 days' dressed gross pay per year, the TRY 73,729.87 ceiling for H2 2026, stamp duty and a worked example.
Turkish severance pay (kıdem tazminatı) is owed to employees with at least one year of service whose contract ends for a reason listed in the law. It is 30 days of gross pay plus regular benefits per full year, prorated, capped at TRY 73,729.87 per year for terminations from 1 July to 31 December 2026. Only stamp duty is withheld.
The ceiling in this article applies to terminations from 1 July to 31 December 2026.
Why severance is a liability, not a package
In many countries severance is a negotiated exit package. In Turkey it is a statutory right that grows with each year of service. Treat it as a liability, not a one-off exit cost.
Who is entitled to severance pay?
Under the Ministry of Labour’s inspection handbook, three conditions apply together: the contract ended for a qualifying reason, the employee worked at least one year for the same employer, and the claim is not time-barred.
Qualifying reasons:
- Dismissal by the employer without just cause. Dismissal for breach of morality and good faith under Labour Law No. 4857, Article 25, does not qualify.
- Resignation by the employee for just cause (Law No. 4857, Article 24).
- Compulsory military service.
- Retirement.
- Leaving voluntarily after meeting the non-age retirement conditions (insured period and premium days).
- A woman leaving voluntarily within one year of marriage.
- Death.
Ordinary resignation does not qualify. Retirement conditions depend on the individual; document them with a letter from the Social Security Institution (SGK).
The formula (Labour Law No. 1475, Article 14)
Severance rests on Article 14 of Labour Law No. 1475, the one article of that law kept in force by Law No. 4857, Article 120: 30 days’ pay for each full year of service, and the same rate for any part of a year.
Formula
- Base monthly amount = the lower of the dressed gross wage and the ceiling on the termination date
- Gross severance = base monthly amount × (full years + extra months ÷ 12 + extra days ÷ 365)
- Net = gross − stamp duty (0.759%)
Prorating by ÷12 and ÷365 is common practice; the law says “at the same rate”. A contract or collective agreement can raise the 30 days in the employee’s favour, but the annual amount still cannot exceed the ceiling.
Step by step
1. Service period. Count from the start date to the termination date. Periods at different workplaces of the same employer are combined. Write the result as full years, extra months and extra days.
2. Dressed gross wage. This is gross pay plus regular cash and in-kind benefits. Per the Ministry handbook, it includes bonuses, regular premiums, fuel, clothing and rent allowances, transport (shuttle) allowance, private health and life insurance premiums, and meal allowance. It excludes protective clothing provided for the work, occasional overtime pay, public holiday pay and weekly rest-day pay. Convert annual items to a monthly figure (annual total ÷ 12). For variable pay (piece rate, commission), average the pay of the last year over the days worked.
3. Compare with the ceiling. The ceiling in force on the termination date applies (Ministry FAQ).
| Termination date | Ceiling per year of service |
|---|---|
| 1 January – 30 June 2026 | TRY 64,948.77 |
| 1 July – 31 December 2026 | TRY 73,729.87 |
Sources: Ministry of Labour, July 2026 ceiling; ceilings 1980–2026. The parties cannot agree to change the ceiling.
4. Multiply by the service period.
5. Deduct stamp duty only. No income tax (Income Tax Law No. 193, Art. 25/7) and no social security contributions (Law No. 5510, Art. 80/1-b-4) are withheld. Stamp duty is 0.759% (Stamp Duty Law No. 488, Table (1) IV-1-b). For how monthly payroll filings work, see withholding and premium service return.
Worked example (illustrative inputs)
Illustrative example: the pay and service figures are made up and do not describe a real person. The ceiling and stamp duty rate come from the official sources above.
Example A: pay below the ceiling
| Input / step | Amount (TRY) |
|---|---|
| Example termination date | 16 Nov 2026 (ceiling period 1 Jul–31 Dec 2026) |
| Example service | 6 years 4 months |
| Example monthly gross pay | 50,000.00 |
| Example regular meal allowance | 4,000.00 |
| Example regular transport allowance | 2,000.00 |
| Example annual bonus 24,000 ÷ 12 | 2,000.00 |
| Dressed gross wage | 58,000.00 (below 73,729.87, so the wage itself is the base) |
| 6 full years: 58,000.00 × 6 | 348,000.00 |
| 4 extra months: 58,000.00 × 4 ÷ 12 | 19,333.33 |
| Gross severance | 367,333.33 |
| Stamp duty: 367,333.33 × 0.00759 | 2,788.06 |
| Net payment | 364,545.27 |
Example B: pay above the ceiling
| Input / step | Amount (TRY) |
|---|---|
| Example termination date and service | 16 Nov 2026; 6 years 4 months |
| Example dressed gross wage | 95,000.00 |
| Base (ceiling) | 73,729.87 |
| 6 full years: 73,729.87 × 6 | 442,379.22 |
| 4 extra months: 73,729.87 × 4 ÷ 12 | 24,576.62 |
| Gross severance | 466,955.84 |
| Stamp duty: 466,955.84 × 0.00759 | 3,544.19 |
| Net payment | 463,411.65 |
Neither example includes notice pay, unused leave or final-month salary. If you’d rather hand off the payroll side of an exit, see our severance and notice pay service.
Common mistakes
- Using bare gross pay and leaving out regular benefits.
- Using the ceiling of the wrong period: the termination date decides, not the payment date.
- Applying the ceiling to the total instead of to the amount per year of service.
- Withholding income tax or social security contributions.
- Applying the severance ceiling to notice pay. Notice pay is a separate item and is not subject to the ceiling.
- Ignoring extra months and days.
Other exit items
Notice pay, unused annual leave, the SGK termination notification and the final month’s payslip are handled separately. See what is payroll in Turkey.
Reporting comes in Turkish and English. See also payroll outsourcing in Turkey for foreign companies.
Frequently asked questions
What is the severance pay ceiling in Turkey for 2026?
For terminations between 1 July and 31 December 2026, the severance pay ceiling is TRY 73,729.87 gross per year of service; from 1 January to 30 June 2026 it was TRY 64,948.77. The ceiling in force on the termination date applies. It is usually reset in January and July, when civil servant pay coefficients change.
Who is entitled to severance pay in Turkey?
An employee with at least one year at the same employer is entitled when the contract ends for a qualifying reason. These include dismissal without just cause, resignation for just cause, compulsory military service, retirement or leaving after meeting the retirement conditions other than age, a woman leaving within one year of marriage, and death. Ordinary resignation does not qualify.
What is deducted from severance pay in Turkey?
Only stamp duty is deducted from severance pay; income tax and social security contributions are not withheld. The stamp duty rate on wage and compensation payments is 0.759 percent. Notice pay and unused leave paid at the same time are separate items, and their own deductions are calculated separately in the final payroll.
Can severance pay be paid in instalments?
Yes, severance pay can be paid in instalments if the employee and the employer agree. The law sets no specific rule or limit on the number of instalments. If instalments are paid late, the employee is entitled to interest from the termination date. Putting the agreement and the payment plan in writing helps avoid disputes.
This article is for general information only and is not legal or tax advice. Rates, amounts and deadlines change; check the current legislation or consult a licensed accountant before acting.
Sources
- Ministry of Labour and Social Security (ÇSGB), severance ceiling, July 2026: https://www.csgb.gov.tr/Media/5vuhphpb/k%C4%B1dem-tazminat%C4%B1-2026_temmuz-d%C3%B6nem.pdf
- ÇSGB, annual severance ceilings 1980–2026: https://www.csgb.gov.tr/Media/ydelgoxf/kidem-tazminati-yillar-1980-2026.pdf
- ÇSGB inspection handbook, termination of employment and related claims: https://www.csgb.gov.tr/Media/0l1hekk5/i%C5%9F-s%C3%B6zle%C5%9Fmesinin-sona-ermesi_23_06_2026-1.pdf
- ÇSGB FAQ (EN): https://www.csgb.gov.tr/en/frequently-asked-questions/general-directorate-of-labor/business-rules/
- Labour Law No. 1475, Article 14: https://www.mevzuat.gov.tr/MevzuatMetin/1.5.1475.pdf
- Income Tax Law No. 193, Article 25/7: https://www.mevzuat.gov.tr/MevzuatMetin/1.4.193.pdf
- Law No. 5510, Article 80/1-b-4: https://www.mevzuat.gov.tr/MevzuatMetin/1.5.5510.pdf
- Stamp Duty Law No. 488, Table (1) IV-1-b: https://www.mevzuat.gov.tr/MevzuatMetin/1.5.488.pdf