Severance pay is a compensation payment made to the employee whose employment contract is terminated due to the conditions and reasons stipulated in Article 14 of the Labor Law No. 1475 or to his heirs in case of his death. This compensation is defined within the framework of the Labor Law in order to protect the rights of workers and to ensure the economic security of employees. Severance pay is generally considered as a reward for the benefits and loyalty provided by the employee to the employer during the working period and is paid when the employee leaves the job for the reasons listed in the law.
Conditions Required to Earn Severance Pay
In order to be entitled to severance pay, various conditions must be fulfilled. These conditions can be listed as follows:
- At least One Year Seniority: The employee must have worked for the same employer for at least one year without interruption.
- Justified Termination Status: If the employee leaves his/her job voluntarily, it must be based on justified reasons for termination (for the reasons listed in Article 24 of Law No. 4857). Reasons for justified termination include, for example, non-payment of wages, violation of occupational health and safety.
- Retirement or Military Service: Workers who leave their jobs due to retirement or military service are also entitled to severance pay.
- Separation due to Marriage: Female workers can claim severance pay if they voluntarily quit their jobs for this reason within one year from the date of marriage.
- Unfair or Valid Termination: The right to severance pay also arises if the employer dismisses the employee unfairly or dismisses the employee for valid reasons.
Severance Pay Calculation Methods
Severance pay is calculated on the basis of the employee’s last dressed gross salary. Below, the calculation process is explained step by step:
- Determining the Last Gross Wage: The calculation of severance pay is based on the last gross wage of the employee. In addition to the net wage, the gross wage also includes bonuses and allowances such as travel and meal payments.
- Amount of Seniority-based Compensation: For each year of employment, a severance payment equal to one month’s gross wage is paid.
- Ceiling Amount: Severance pay cannot exceed the annual ceiling amount. This ceiling amount is determined and announced by the government every year. For the first six months of 2025, this amount is 46,655.43TL. In other words, even if a worker receives a salary of 100,000 TL, he/she may be entitled to 46,655.43 TL severance pay for one year of seniority.
Example: If a worker’s last dressed gross wage is 40,000 TL and he has worked for 10 years and 6 months so far, his total severance pay will be 420,000 TL (40,000 TL x 10 x 6/12).
Click here to access our Severance Pay Calculation Robot.
Severance Pay and Methods to Protect the Rights of the Worker
Severance pay is one of the most fundamental rights of the worker and the following steps can be taken to protect this right:
- Reviewing the Separation Process: In case of termination of the employment contract, the working process and the conditions of separation should be carefully examined, and all rights of the employee, including the possibility of benefiting from the job security provisions, i.e. the possibility of a reinstatement lawsuit, should be carefully determined.
- Seeking Legal Advice: Getting support from a Labor Law Specialist Lawyer ensures that you protect your rights in the best way possible. It prevents loss of rights that may arise from lack of legal knowledge.
- Filing a Lawsuit: In cases where severance pay is not paid, first of all, mandatory mediation should be applied and in case of disagreement, the judicial remedy should be applied.
- Keeping Documents and Papers: Keeping documents such as payslips, employment contracts and working documents (such as work shift schedules) makes it easier for you to make a claim.
Severance pay is critical for workers to be compensated for their labor and to have economic security. In order to protect your legal rights, it is very important to get professional legal assistance, access the right information and follow the legal processes meticulously. Our Law Firm assists you with all your questions and needs regarding severance pay and labor law.
