When the employment relationship ends, two of the most frequently asked-about claims are severance pay (kıdem tazminatı) and notice pay (ihbar tazminatı). These are two distinct payments with different conditions, and they are commonly confused. This article explains both — when the employee is entitled to them, how they are calculated, and the situations in which they are not payable.
What Is Severance Pay?
Severance pay is the lump sum the employer is required to pay to the employee — under specific conditions when the employment ends — in recognition of past years of service. The legal basis is Article 14 of the former Labour Law No. 1475, which remains in force today even after Labour Law No. 4857 came into effect.
Conditions for Severance Pay
Severance pay is not paid automatically on every termination. The following conditions must all be met:
- At least one year of service. Employees with less than one year are not entitled.
- The employment must end for one of the reasons listed in the law. See below.
- Service must be with the same employer. Continuity is preserved across workplace transfers.
When Is Severance Pay Owed?
The employee is entitled to severance pay in the following situations:
- Termination by the employer without just cause
- Termination by the employee with just cause (e.g. unpaid wages, mobbing, breach of occupational health and safety)
- The employee is called up for compulsory military service
- The employee becomes entitled to retirement
- A female employee resigning due to marriage, within one year of the marriage
- The death of the employee (paid to the heirs)
When Is Severance Pay Not Owed?
- The employee resigns without just cause
- The employer terminates with just cause under Article 25/II of the Labour Law (breach of morality and good faith, theft, unjustified absenteeism, etc.)
- The one-year service requirement is not met
How Is Severance Pay Calculated?
The calculation is relatively simple, but the details can lead to significant differences:
Severance Pay = Years of completed service × 30 days of "loaded" gross wage
+ (proportional payment for any remaining months/days)
The concept of "loaded gross wage" (giydirilmiş brüt ücret) is essential: it is not only the bare salary but also continuing fringe benefits such as bonuses, transport and meal allowances, premiums and clothing allowances. A common cause of underpayment is calculating with the bare wage instead of the loaded wage.
The Severance Pay Ceiling
Severance pay is subject to a statutory ceiling. The 30-day wage used in the calculation cannot exceed the highest retirement bonus paid to civil servants. This ceiling is updated twice a year (in January and July) along with the civil servant salary coefficient. For the current figure, refer to the announcements published by the Ministry of Labour and Social Security.
What Is Notice Pay?
Notice pay is the compensation payable by the party who terminates the employment contract without giving the statutory advance notice. It applies to both employer and employee — meaning that an employee who quits without giving the required notice may be liable to the employer for notice pay.
Notice Periods
Under Article 17 of Labour Law No. 4857, the notice periods based on length of service are:
- Less than 6 months of service → 2 weeks
- Between 6 months and 1.5 years → 4 weeks
- Between 1.5 and 3 years → 6 weeks
- More than 3 years → 8 weeks
These are minimum periods; they may be increased — but not reduced — by contract.
Notice Pay Calculation
Notice Pay = Notice period (days) × Daily loaded gross wage
For example, an employee with 4 years of service and a daily gross wage of TRY 1,000 has a notice period of 8 weeks = 56 days, giving a notice pay of TRY 56,000 (calculated on the loaded wage).
Key Differences Between Severance and Notice Pay
Many employees confuse the two. The main differences are:
- Severance pay compensates past service; notice pay compensates failure to give the statutory notice.
- Severance pay requires at least 1 year of service; notice pay does not.
- Where the employee terminates with just cause, severance pay is owed but notice pay is not.
- Where the employer terminates with just cause without notice, neither severance nor notice pay is owed to the employee.
Time Limits
Severance pay claims are subject to a five-year limitation period running from the date the employment contract ends. The same five-year limitation applies to notice pay. Failing to bring an action within these periods leads to serious loss of rights.
Frequently Asked Questions
Gross or net?
By law, severance pay is calculated on the gross wage and is exempt from all taxes except stamp duty. Notice pay, however, is subject to income tax — meaning the gross-to-net conversion produces a smaller amount for notice pay.
The employer is not paying. What should I do?
You should first send the employer a written demand. If no payment follows, mandatory mediation applies before court. If mediation fails, an action can be filed at the Labour Court. Working with an employment lawyer through this process can both speed it up and prevent loss of rights.
Is severance available under a fixed-term contract?
As a rule, severance pay is not generated by fixed-term contracts. However, where the contract was made fixed-term without an objective reason, or was renewed in a chain (zincirleme), the Court of Cassation has accepted that the contract may be treated as indefinite-term and severance pay may then be owed.
I work at minimum wage. Am I still entitled to severance?
Yes. Severance pay applies to minimum-wage employees under exactly the same rules. A low salary does not eliminate the right to severance.
The employer asked me to sign a release. Is it valid?
Releases signed during the employment relationship or before the right to severance has crystallised are largely deemed invalid. However, releases (ibraname) signed after the employment ends, on the actual amounts due, and with the employee's free will may be deemed valid. In case of doubt, do not sign without legal advice.
Pursuing your severance and notice claims?
At Çağlar Hukuk ve Danışmanlık, our Antalya office assists clients with employee receivables, severance and notice pay claims, reinstatement actions and mandatory mediation processes.
Official sources: Labour Law No. 4857 · Former Labour Law No. 1475 — Article 14