What is kıdem tazminatı (Turkish severance pay)?
Kıdem tazminatı is Türkiye’s statutory severance pay: an employee whose employment ends in one of the ways listed in the law, after at least one full year of service with the same employer, is entitled to 30 days’ gross wage for every year of service, calculated over the final “dressed” wage (base salary plus regular benefits such as meal and transport allowances). It is the single largest employment-cost item in Turkish M&A and workforce planning.
How it is calculated
The formula is: final dressed gross monthly wage × years of service (pro-rated for partial years) — subject to a statutory ceiling per year of service, updated twice a year in line with civil-servant coefficients. As of 1 July 2026 the ceiling is TRY 73,729.87 per year of service (TRY 64,948.77 for January–June 2026). Severance is exempt from income tax up to the ceiling; only stamp tax (0.759%) is withheld.
Example: an employee with 5 years’ service and a dressed gross wage of TRY 90,000 receives 5 × 73,729.87 = TRY 368,649.35 — the ceiling applies because the wage exceeds it.
When is it owed — and when not?
Severance is due on employer termination without just cause, on the employee’s justified termination (e.g. unpaid wages, health, harassment), on retirement or reaching pension eligibility, on compulsory military service, on the employee’s death, and — for female employees — resignation within one year of marriage. A plain resignation, or an employer termination for just cause under Art. 25/II of the Labour Code (immoral or dishonourable conduct), defeats the claim.
Is severance capped even for high earners?
Yes. However senior the executive, each year of service accrues at most the ceiling amount — unless an employment contract validly promises more, which is permissible.
How does severance affect M&A deals?
Accrued severance is a classic due diligence item: buyers model it as a debt-like item or require an escrow/indemnity, because a share deal transfers the liability with the company and service periods carry over on transfers of undertakings.
Can an employer pay severance in instalments?
Only with the employee’s written consent; otherwise it falls due in full at termination and accrues the highest deposit interest rate.
Need help with a termination package or workforce restructuring? See our Employment Law practice.