What is notice pay (ihbar tazminatı)?
Notice pay (ihbar tazminatı) is the compensation owed under Turkish Labour Code Art. 17 when an indefinite-term employment contract is terminated without observing the statutory notice period. The periods scale with seniority: 2 weeks (under 6 months of service), 4 weeks (6–18 months), 6 weeks (18 months–3 years) and 8 weeks (over 3 years) — and they bind both sides: an employee who walks out without notice owes it too.
How it differs from severance
Notice pay compensates the missing warning period; severance (kıdem tazminatı) rewards accrued service. They stack: a no-fault employer termination after four years typically triggers both. Notice pay has no cap and is calculated on the “giydirilmiş” (fully loaded) gross wage — base salary plus regular benefits like meal and transport allowances. Termination for just cause (İş K. m.25/II) eliminates notice; invalid “cause” converts into notice-pay exposure plus, in protected workplaces, reinstatement risk.
Startup-specific friction points
Three recur. Garden-leave style arrangements: Turkish law lets the employer pay in lieu immediately rather than keep the employee through notice — but the choice affects bonus accrual and option vesting cut-offs, so time it consciously. Contractual notice periods can be extended (never shortened) — senior hires often negotiate longer notice, which becomes an unplanned cost at exit. And resignations timed before a vesting cliff: an employee resigning without notice owes ihbar, which companies rarely collect but can set off against final pay within legal limits.
Is notice pay taxable?
Yes — unlike severance (exempt up to the ceiling), notice pay is subject to income tax; only stamp-tax treatment aligns. Budget it gross.
Can the parties waive it in the contract?
Advance waivers are invalid; the entitlement can only be settled after termination, ideally within an ibraname meeting the strict statutory form.
Related: severance pay, fixed-term contract.