Severance Pay
Calculate Turkish severance pay (kidem tazminati) and net salary with current legal caps and deduction rates. Handles partial years and applies the latest government ceiling automatically.
Key features
- Accurate kıdem tazminatı calculations with legal caps
- Calculate net salary after all taxes and SGK
- Handles partial years and complex data entries
- Based on the latest Turkish labor law updates
Guide
Severance pay in Turkey, known as kidem tazminati, is a legal right for employees who have worked at the same employer for at least one full year. The entitlement applies when the employment ends under qualifying conditions: termination without just cause by the employer, resignation for a valid reason recognized by law (such as military service, retirement, marriage within one year for female employees), or the employer's failure to meet contractual obligations. Understanding how this payment is calculated, what caps apply, and which deductions reduce the gross amount is essential for anyone leaving a job in Turkey. The core formula for kidem tazminati is straightforward. You earn 30 days of gross salary for each full year of employment. For partial years, the calculation is prorated on a daily basis. If you worked 4 years and 7 months, you receive 4 full years plus 7/12 of an additional year. The gross salary used in this formula is not your base salary alone. Turkish labor law requires the use of "giydirilmis brut" (dressed gross), which includes your base salary plus regular bonuses, consistent overtime payments, meal allowances, transportation benefits, and any other compensation you receive on a regular and predictable basis. A common mistake is using only the base salary, which can understate the entitlement by 15 to 30 percent. The Turkish government sets a quarterly ceiling on severance pay per year of service. As of early 2026, this ceiling is updated every January and July based on the highest-ranking civil servant's retirement bonus. If your dressed gross salary exceeds the current ceiling, the calculation caps at the ceiling amount per year rather than your actual salary. For example, if the ceiling is 35,058.58 TL per year and your monthly dressed gross salary is 40,000 TL, the calculation uses 35,058.58 TL as the base for each year of service. This ceiling is the single most important variable in high-salary severance calculations, and missing it leads to inflated expectations. Severance pay in Turkey is exempt from income tax and stamp tax. This is a significant benefit compared to regular salary, which faces a progressive income tax rate ranging from 15% to 40% plus a 0.759% stamp tax. The full gross amount of your kidem tazminati is what you receive as net payment. However, this tax exemption only applies to severance pay that falls within the legal ceiling. Any amount paid above the ceiling by the employer as a goodwill gesture is subject to normal taxation. The net salary calculation that often accompanies severance discussions is a separate but related concern. Your monthly net salary is your gross salary minus SGK employee premiums (14% for retirement and disability, plus unemployment insurance), income tax (progressive rates from 15% to 40% depending on your cumulative annual income), and stamp tax (0.759%). The SGK premium is calculated on the gross salary up to a monthly ceiling, and income tax uses a cumulative bracket system that resets each January. This means your net salary in December is typically lower than in January because you have moved into higher tax brackets as the year progressed. Calculating severance pay manually requires tracking several variables: your exact start date, your end date, the applicable ceiling at the time of termination, your dressed gross salary with all regular additions, and whether any of your service years span ceiling changes. The WebRecast severance pay calculator handles all of this. You enter your gross salary, start date, and end date. The tool applies the correct ceiling, prorates partial years, and displays a complete breakdown showing gross entitlement, applicable deductions, and the net amount you should receive. There are several qualifying conditions for severance pay that employees should understand. Voluntary resignation generally does not qualify, with specific exceptions: completing 15 years of SGK contributions and 3,600 days of premium payments, being called for military service, female employees marrying within one year of the wedding date, and health reasons certified by a medical board. Termination by the employer without just cause always qualifies. Termination for just cause under Article 25/II of the Labor Law (moral and good faith violations) does not qualify. The distinction between these termination types is critical and often disputed in Turkish labor courts. For employees with long tenures, the calculation becomes more involved because the ceiling changes every six months. Strictly speaking, the ceiling applicable at the date of termination applies to the entire severance calculation, not the ceiling in effect during each year of service. This is a point of confusion, but Turkish case law is clear: the ceiling valid at the termination date is the one used for the entire calculation. This actually benefits employees when the ceiling increases over time, which it typically does. Practical scenarios help illustrate the calculation. Consider an employee with 8 years and 3 months of service, a base salary of 25,000 TL, regular meal and transportation allowances of 3,000 TL, and a consistent quarterly bonus averaging 2,500 TL per month. The dressed gross salary is 30,500 TL. Assuming the current ceiling is 35,058.58 TL per year of service, the salary falls below the ceiling, so the full amount applies. The calculation: 30,500 TL multiplied by (8 + 3/12) = 30,500 multiplied by 8.25 = 251,625 TL gross. Since kidem tazminati is tax-exempt, this is also the net amount. Now consider a higher-salary scenario. An employee earns a dressed gross of 45,000 TL with 12 years of service. The ceiling caps the per-year amount at 35,058.58 TL. The calculation: 35,058.58 TL multiplied by 12 = 420,702.96 TL. The employee loses the excess above the ceiling for each year of service. If the employer voluntarily pays the difference (45,000 minus 35,058.58 = 9,941.42 TL per year, totaling 119,297.04 TL for 12 years), that excess portion is subject to income tax and stamp tax. The SGK and tax calculations for net salary deserve separate attention. SGK employee contributions include the retirement premium (9%), general health insurance premium (5%), and unemployment insurance premium (1%), totaling 15% of gross salary up to the SGK ceiling. Income tax is applied to the remaining amount after SGK deductions, using progressive brackets. The first bracket (up to roughly 110,000 TL cumulative annual income in 2026) is taxed at 15%, the next bracket at 20%, then 27%, 35%, and finally 40% for cumulative income above approximately 4,300,000 TL. Stamp tax at 0.759% is calculated on the full gross salary. Employees negotiating their exit should understand several leverage points. First, the dressed gross calculation is often a point of negotiation. If you received regular bonuses or consistent overtime, insist on their inclusion. Second, unused annual leave must be paid separately and is subject to regular income tax. Third, the notice period (ihbar suresi) depends on your tenure: 2 weeks for up to 6 months of service, 4 weeks for 6 to 18 months, 6 weeks for 18 to 36 months, and 8 weeks for over 36 months. If the employer terminates without providing the notice period, they must pay ihbar tazminati (notice pay) in addition to severance pay. Common errors in severance calculations include using the base salary instead of dressed gross, applying the wrong ceiling (using last year's ceiling instead of the current one), failing to prorate partial years, and confusing gross with net amounts. The WebRecast calculator eliminates these errors by applying the correct formulas and current legal parameters automatically. It also handles the net salary breakdown so you can understand both your severance entitlement and your regular monthly take-home pay. For employers, properly calculating and paying kidem tazminati is a legal obligation. Underpayment can result in labor court proceedings where the employer may also owe interest at the legal rate from the termination date. Courts calculate interest on the difference between what was paid and what was owed, which can add up significantly in cases that take years to resolve. The legal interest rate on severance pay disputes is the highest legal commercial interest rate, which compounds the cost of underpayment substantially. The severance pay calculator is particularly useful during three scenarios: when you are negotiating an exit package and want to verify the employer's offer, when you are considering resignation and want to understand what you are giving up, and when you are planning your finances around a career change and need accurate numbers for your savings projections. In all three cases, having a reliable calculation tool that applies current legal parameters gives you the information you need to make informed decisions. A detailed walkthrough of the net salary calculation helps clarify how your monthly take-home pay is determined. Start with your gross salary. Suppose it is 35,000 TL per month. First, subtract the SGK employee share: 35,000 x 0.14 = 4,900 TL for retirement and disability insurance, plus 35,000 x 0.01 = 350 TL for unemployment insurance. Total SGK deduction: 5,250 TL. The income tax base is 35,000 minus 5,250 = 29,750 TL. If this is your January salary and no cumulative income has accrued yet, the entire 29,750 TL falls within the 15% bracket, so income tax is 29,750 x 0.15 = 4,462.50 TL. Stamp tax is 35,000 x 0.00759 = 265.65 TL. Your net salary for January: 35,000 minus 5,250 minus 4,462.50 minus 265.65 = 25,021.85 TL. By July, your cumulative income tax base has reached approximately 208,250 TL (29,750 x 7 months). Part of this now falls into the 20% bracket. The portion above the 15% threshold (roughly 110,000 TL in 2026) is taxed at 20% instead of 15%. This means your July net salary is lower than your January net salary even though your gross has not changed. This progressive taxation effect is called "vergi dilimi artisi" (tax bracket escalation) and catches many employees off guard. By December, higher earners may have portions of their salary taxed at 27% or even 35%, creating a noticeable decline in monthly take-home pay throughout the year. The concept of AGI (asgari gecim indirimi, minimum living allowance) provides a small tax reduction based on marital status and number of dependents. A single employee receives a lower AGI than a married employee with children. The AGI reduces the income tax amount slightly each month, with the exact benefit depending on the current minimum wage and your family composition. The calculator accounts for AGI when computing net salary. Understanding the relationship between severance pay and unemployment benefits is also important. Employees who are terminated without just cause are eligible for both kidem tazminati and unemployment benefits (issizlik maasi) from ISKUR, the Turkish Employment Agency. Unemployment benefits are calculated at 40% of the average daily gross salary over the last four months, with a cap tied to the gross minimum wage. The duration depends on your contribution history: 600 days of contributions in the last 3 years qualifies you for 180 days of benefits, 900 days qualifies for 240 days, and 1,080 or more days qualifies for 300 days. These benefits are separate from and in addition to severance pay. Another financial consideration during job transitions is the impact on your private pension (BES, Bireysel Emeklilik Sistemi) and employer-matched contributions. If your employer contributes to a BES plan, those employer contributions vest according to a schedule (typically 3 years for partial vesting, up to 6 years for full vesting). Leaving before full vesting means forfeiting a portion of the employer's contributions. Factor this into your overall separation calculation. The statute of limitations for severance pay claims in Turkey is 5 years from the date of termination under the current law (reduced from 10 years by the 2017 amendment). If you believe you were underpaid or denied severance pay, you have 5 years to file a claim through the labor court. Before filing, you must first apply to a labor mediation center (arabuluculuk), as mandatory mediation is a prerequisite for labor lawsuits in Turkey since 2018. For workers in sectors with collective bargaining agreements (toplu is sozlesmesi), severance pay may be enhanced beyond the legal minimum. Some agreements specify higher per-year amounts, include additional bonuses upon termination, or define dressed gross more broadly. If your workplace has a collective agreement, review its severance provisions carefully, as they may entitle you to more than the statutory calculation. The calculator also helps with financial planning for career changes. If you are considering leaving a stable job to start a business, change industries, or pursue further education, knowing your exact severance entitlement helps you build a realistic financial bridge. Calculate your monthly expenses, divide your severance pay by that number, and you know how many months of runway you have. Add unemployment benefits to extend that runway. This concrete financial picture turns an emotional career decision into a data-driven one. Tax planning around termination timing can also save money. Since income tax brackets are cumulative and reset each January, being terminated in December means your final month's salary (and any unused leave payout) is taxed at your highest annual rate. Being terminated in January means the same payments are taxed at the lowest rate. While you rarely control your termination date, if you are negotiating a mutual separation agreement, the timing can affect your net payout by several thousand lira. The severance pay itself remains tax-exempt regardless of timing, but the unused leave payout, notice pay (ihbar tazminati), and any other compensation are all subject to the cumulative income tax rate applicable at the time of payment. The distinction between fixed-term and indefinite-term employment contracts matters for severance eligibility. Employees on indefinite-term contracts (the standard type in Turkey) are entitled to severance pay when their employment ends under qualifying conditions. Employees on fixed-term contracts are generally not entitled to severance pay when the contract expires naturally at its end date, because the employment was not terminated. However, if the employer terminates a fixed-term contract before its expiration date without just cause, severance pay is owed. Courts also look at whether a series of consecutive fixed-term contracts effectively constitutes indefinite employment, in which case severance rights apply. Transfer of business ownership (isyeri devri) does not reset your severance clock. Under Article 6 of the Labor Law, if your employer sells the business or merges with another company, your employment is considered continuous with the new employer. Your start date with the original employer counts toward your severance calculation. The new employer inherits the severance pay obligation for the full duration of your employment. If you are terminated after a business transfer, your severance is calculated from your original start date, not the transfer date. Seasonal and part-time workers have severance rights too, but the calculation adjusts for actual working time. A seasonal worker who works 8 months per year for 5 years has not necessarily accumulated 5 years of severance-eligible service. The calculation counts only the periods of active employment. Part-time employees earn severance at a rate proportional to their working hours. If a part-time employee works 20 hours per week instead of the standard 45, their severance is calculated on a prorated basis. Mutual termination agreements (ikale sozlesmesi) have become increasingly common in Turkey as an alternative to unilateral termination. In an ikale agreement, the employer and employee mutually agree to end the employment relationship, often with a severance package that exceeds the statutory minimum. From a tax perspective, the portion of the ikale payment that corresponds to statutory severance pay is tax-exempt, but any additional payment (such as a signing bonus for the agreement) is subject to income tax. The Yargitay (Supreme Court of Appeals) scrutinizes ikale agreements to ensure they contain a reasonable additional benefit for the employee beyond statutory entitlements, as otherwise the agreement may be viewed as a disguised termination. When multiple employees are terminated simultaneously (such as during mass layoffs), the employer must follow specific notification procedures under Turkish law. Layoffs affecting 10 or more employees at workplaces with 20 to 100 employees, or affecting 10% or more of the workforce at workplaces with 101 to 300 employees, or affecting 30 or more employees at workplaces with over 300 employees, require 30 days advance notification to the regional labor directorate and ISKUR. Failure to follow these procedures does not eliminate severance pay obligations but can result in additional penalties for the employer. The severance pay fund (kidem tazminati fonu) has been discussed in Turkish legislative circles for decades as a potential reform. The proposed system would replace the current employer-liability model with a centralized fund to which employers contribute a percentage of each employee's salary monthly. While no such fund has been enacted as of 2026, the ongoing legislative discussion means the rules governing severance pay could change. The calculator applies the rules currently in effect and will be updated if the law changes. For expatriates working in Turkey, severance pay applies equally to foreign nationals employed under Turkish labor law. Work permit holders who are terminated without just cause are entitled to kidem tazminati on the same terms as Turkish citizens. The calculation uses the same formula, the same ceiling, and the same tax exemptions. The only additional consideration is that severance pay is denominated in Turkish lira, so exchange rate fluctuations affect the equivalent value in your home currency. One final point on documenting your severance entitlement: keep copies of your payroll slips (bordro), employment contract, any amendments to the contract, records of bonuses received, and your SGK service record (hizmet dokumu, available from e-Devlet). If a dispute arises months or years after termination, these documents are your evidence for the dressed gross salary calculation and your exact dates of service. The WebRecast severance pay calculator gives you the numbers. Your records prove the inputs are correct.
Frequently asked questions
Does this include the annual severance cap?
Yes. The tool automatically applies the latest legal maximum ceiling.
Is this official?
I provide highly accurate estimates based on standard formulas. It's always a good idea to double-check with your HR or accountant!
