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.
How much is it? Worked examples for the second half of 2026
The figures below are gross, calculated with the TRY 73,729.87 ceiling in force from 1 July 2026, before stamp tax. Partial years count pro rata.
| Service | Dressed gross monthly wage | Calculation | Gross severance |
|---|---|---|---|
| 2 years | TRY 40,000 | 2 × 40,000 (below the ceiling) | TRY 80,000 |
| 7 years 6 months | TRY 60,000 | 7.5 × 60,000 (below the ceiling) | TRY 450,000 |
| 10 years | TRY 120,000 | 10 × 73,729.87 (ceiling applies) | TRY 737,298.70 |
The wage used is the last dressed gross wage; regular payments made during the year, such as bonuses, are spread over twelve months and added. The ceiling is the one in force on the termination date.
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.
Conditions for entitlement
Three conditions must be met together: the employee works under Labour Law No. 4857; the employee has at least one full year of service at the same employer’s workplace or workplaces; and the employment contract ends in one of the ways listed in Article 14 of Law No. 1475, which remains in force. The probation period counts towards service, and periods spent at different workplaces of the same employer are added together. On a transfer of a workplace (Article 6 of Law No. 4857), service continues to accrue against the transferee employer; the transfer alone does not trigger severance pay.
Severance pay versus notice pay
Severance pay compensates past service and depends on the reason for termination. Notice pay (ihbar tazminatı) is the price of terminating without observing the notice periods in Article 17 of Law No. 4857 (two, four, six or eight weeks depending on length of service). Both can arise together: an employer that terminates without just cause and without observing the notice period pays both. Their tax treatment also differs: severance pay is exempt from income tax up to the ceiling, while notice pay is taxed like wages.
Limitation period and late-payment interest
For employment contracts ending after 25 October 2017, severance claims are subject to a five-year limitation period (Additional Article 3 of Law No. 4857). Unpaid severance accrues the highest interest rate applied to deposits from the termination date (Article 14 of Law No. 1475). Because this rate is well above the statutory interest rate, late payment can turn into the most expensive item in a termination package. In collective redundancies and restructurings, these two points make it necessary to fix the payment schedule in the agreement.
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.
For termination packages and workforce restructuring, see the Employment Law page.
Sources. Labour Law No. 4857 and Labour Law No. 1475 (Article 14 on severance pay, still in force). Statute links open the official consolidated Turkish texts on mevzuat.gov.tr.