In Turkey, severance pay is a legally protected employee right under the Turkish Labor Law (Law No. 1475, Article 14). Employers must pay severance compensation to eligible employees upon termination under certain conditions. Whether you are an employee or a foreign employer operating in Turkey, understanding the legal framework of severance pay in Turkey is essential to ensure compliance and avoid litigation.
At ER&GUN&ER Law Firm, our English speaking Turkish lawyers provide legal consultancy on employment termination, severance calculations, and dispute resolution. As a leading Turkish Law Firm recognized as a best lawyer firm in Turkey for labor law, we represent both employees and corporate HR teams in severance-related claims and negotiations.
When Is Severance Pay Required in Turkey?
Severance pay becomes legally obligatory when the employee:
- Has worked for at least one full year
- Is terminated by the employer without just cause
- Resigns due to retirement, marriage (for female employees), military service, or force majeure
- Passes away during employment
Our English speaking Turkish lawyers assist both sides in evaluating whether legal thresholds are met, and what documentation is required to support the termination. A Turkish Law Firm with expertise in labor law will also determine whether the termination was lawful under Article 25 or arbitrary—triggering compensation obligations.
Also see: how employment contracts in Turkey affect termination compensation
How Is Severance Pay Calculated?
Under Turkish law, severance pay is calculated as one month’s gross salary for each full year of service. Partial years are calculated proportionally. The “salary” includes all regular payments such as base wage, meal/lodging allowances, and bonuses if regularly paid.
Formula: Monthly gross wage x years of service = total severance
Example: An employee earning ₺40,000 gross per month with 5 years of service is entitled to ₺200,000 severance pay upon qualifying termination.
Our Turkish Law Firm prepares official calculation sheets, litigation estimates, and settlement offers. As a best lawyer firm in Turkey, we also resolve disputes arising from underpayment, wrongful termination, or ambiguous contract language affecting severance.
Is Severance Pay Taxable in Turkey?
Severance pay in Turkey is exempt from income tax up to a ceiling determined annually by the Ministry of Treasury and Finance. Payments exceeding this limit may be subject to withholding tax. However, no social security contributions (SGK) are applied to severance pay.
Employers must also issue a detailed termination payslip showing calculation breakdowns, tax-exempt portion, and net payout. Our English speaking Turkish lawyers advise on correct documentation and coordinate tax-safe settlements. As a compliance-focused Turkish Law Firm, we also work with finance teams during audits and labor inspections.
See also: obligations during employee file termination under KVKK
When and How Should Severance Pay Be Paid?
Severance pay must be paid immediately at the time of termination, either in cash or via registered bank transfer. Delayed or partial payments are grounds for legal action and may result in additional penalties, including interest and moral damages.
We help employers structure termination agreements that comply with Turkish Labor Law and offer employees the right to waive future claims where permitted. As a best lawyer firm in Turkey for HR legal support, we routinely prepare bilingual mutual release protocols (ikale sözleşmeleri) to close the employment relationship without exposure.
Filing a Lawsuit for Unpaid Severance
Employees who are not paid severance can file a claim in Turkish Labor Courts (İş Mahkemesi). Claims must be filed within 5 years of termination, although most cases begin within the first year. Lawsuits typically involve:
- Employer’s failure to justify termination
- Disputes over salary or seniority calculations
- Failure to pay within the legal timeframe
- Unlawful contract clauses that restrict severance
Our Turkish Law Firm represents both sides in litigation—employees seeking rightful pay, and employers defending against exaggerated or false claims. A best lawyer firm in Turkey ensures each side is represented with credible evidence, expert witness input, and accurate financial models.
For related guidance: how contract terms affect termination rights
Judicial Interpretation: Yargıtay on Severance Claims
The Turkish Court of Cassation (Yargıtay) has consistently ruled in favor of employees in cases where:
- Termination lacked valid legal justification
- Salary-based calculations were incomplete or incorrect
- Mutual agreements were signed under pressure or without fair compensation
- Employees resigned for cause (such as unpaid wages or harassment)
At ER&GUN&ER Law Firm, our litigation team applies leading case law and local court practices to build effective legal arguments. As a best lawyer firm in Turkey, we use our courtroom experience to deliver favorable results in severance disputes.
Frequently Asked Questions (FAQs)
- Who is entitled to severance pay in Turkey? Employees with at least one year of continuous service who are terminated without cause or resign under qualifying conditions.
- How much severance is paid? One gross monthly salary per year of employment, adjusted for partial years.
- Is severance pay taxable? Only amounts exceeding the statutory ceiling are taxable. Most payments are income tax-exempt.
- Is severance required for resignations? Only in limited cases—retirement, marriage (for women), military service, or forced resignation for cause.
- Can employers avoid severance by labeling contracts differently? No. Turkish labor courts look at the real substance of the relationship, not labels.
- How long do I have to sue? Five years from the date of termination.
- Can a lawyer help with settlements? Yes. An English speaking Turkish lawyer can negotiate, draft, and enforce legal settlements.
Protect Your Rights with Legal Precision
Severance pay in Turkey is a legal right—not a discretionary benefit. Whether you are an employer seeking compliance or an employee fighting for justice, you need solid legal guidance to navigate the complex legal framework and judicial trends.
At ER&GUN&ER Law Firm, our experienced English speaking Turkish lawyers provide legal representation, negotiation support, and litigation strategy for severance disputes. Recognized as a best lawyer firm in Turkey, we protect both corporate and individual clients with clarity, efficiency, and results-driven counsel.