What is kıdem tazminatı, Turkey's severance pay?
Kıdem tazminatı is Turkey's statutory severance payment: an employee with at least one year of service receives 30 days' gross pay for each full year when employment ends for a qualifying reason. The base is the last 'dressed' gross wage — salary plus regular benefits — and each year's payout is capped by a state-set ceiling updated twice a year.
Who qualifies — and the resignations that still pay
Severance in Turkey is a statutory entitlement rather than a negotiated benefit: once an employee passes one year with the same employer, a qualifying end to the contract obliges the employer to pay roughly one gross month per year served. Dismissal qualifies unless it is for serious misconduct — the moral and good-faith grounds in Article 25/II of Labor Law No. 4857 — and an employee's own just-cause termination under Article 24 qualifies too.
The legal basis is Article 14 of the former Labor Law No. 1475, deliberately kept in force. An ordinary resignation forfeits severance, but three statutory exceptions preserve it and often surprise foreign employers: men leaving for compulsory military service, women resigning within one year of marriage, and employees leaving upon qualifying for retirement — including those who have completed the insured-service and premium-day requirements and lack only the age. If the employee dies, the payment goes to their heirs.
The 30-day rule and the 'dressed wage'
Each full year of service earns 30 days of gross pay, with fractions of a year prorated. The base is not the bare salary: Turkish practice uses the giydirilmiş ücret — the 'dressed wage' — which adds regular, continuing benefits such as meal and transport allowances and contractual bonuses to the final gross wage. A per-year ceiling applies: severance for any single year cannot exceed a state-set cap indexed to the highest civil servant's retirement bonus, revised every January and July — 73,729.87 TRY for 1 July – 31 December 2026.
Severance within the statutory entitlement is exempt from income tax and from social security contributions. Only stamp tax at 0.759% is withheld.
What this means when you hire in Turkey
For an employer — through a local entity or an employer-of-record — severance is an accruing liability, not a contingency: budget roughly one gross month per employee per year of service, on the dressed wage, up to the ceiling. It is also why Turkish offboarding depends on clean records: the hire date, the salary history and every recurring allowance feed the final calculation, and disputes usually turn on what counted as part of the dressed wage.
Worked examples: standard, capped and minimum-wage cases
Standard case: an employee with a dressed gross wage of TRY 60,000 and 4 years 6 months of service accrues 4.5 × 60,000 = TRY 270,000 gross severance. Only stamp tax at 0.759% (TRY 2,049.30) is withheld, so the net payment is TRY 267,950.70.
Capped case: for an employee on a TRY 90,000 dressed gross wage, the calculation runs on the ceiling instead of the actual wage — TRY 73,729.87 for 1 July – 31 December 2026. Five full years produce 5 × 73,729.87 = TRY 368,649.35 gross, TRY 365,851.30 net after stamp tax.
Minimum-wage case: one full year at the 2026 gross minimum wage of TRY 33,030 earns TRY 33,030 gross severance — TRY 32,779.30 net. Notice pay (ihbar tazminatı) is a separate item: it corresponds to the statutory notice period of 2–8 weeks by seniority (Labor Law No. 4857, art. 17) and, unlike severance, is subject to income tax.
| Legal basis | Article 14, former Labor Law No. 1475 (kept in force by Law No. 4857) |
| Minimum service | One full year with the same employer |
| Accrual rate | 30 days' dressed gross wage per full year, prorated beyond |
| Ceiling (1 Jul – 31 Dec 2026) | TRY 73,729.87 per year of service |
| Ceiling updates | Every January and July, via the civil-servant pay coefficient |
| Tax treatment | Income-tax exempt within the entitlement, no social security contributions, 0.759% stamp tax only |
Frequently asked
Turkish severance is owed to any employee with at least one year of service whose contract ends for a qualifying reason: dismissal for anything other than serious misconduct, resignation for just cause, compulsory military service, a woman's resignation within one year of marriage, retirement, or the employee's death — in which case the heirs receive the payment (Article 14, Labor Law No. 1475).
An ordinary resignation forfeits Turkish severance pay. The law preserves the entitlement in specific cases: resignation for just cause under Article 24 of Labor Law No. 4857, departure for compulsory military service, a woman resigning within one year of marriage, and leaving upon qualifying for retirement — including the completed-service route where only the age requirement remains outstanding.
The last dressed gross monthly wage — final salary plus regular benefits such as meal and transport allowances — is multiplied by the years of service, with remaining months and days prorated. Each year's amount is capped by the state ceiling, and the payment is exempt from income tax and social security contributions. Only stamp tax is withheld.
The tavan is the maximum severance payable per year of service, indexed to the highest state official's annual retirement bonus and revised every January and July. For 1 July – 31 December 2026 it is 73,729.87 TRY. Employees earning above it accrue severance at the ceiling rather than at their actual wage.
One full year earns 30 days of the dressed gross wage — effectively one gross month — capped by the state ceiling. In 2026 terms: a minimum-wage employee accrues TRY 33,030 gross (TRY 32,779.30 after stamp tax) for the year, while anyone earning above the ceiling accrues at most TRY 73,729.87 per year (the 1 July – 31 December 2026 cap).
Severance within the statutory entitlement carries a single withholding: stamp tax at 0.759%. Income tax does not apply — Income Tax Law No. 193, art. 25/7 exempts severance up to the state ceiling — and no social security contributions are due. On a gross severance of TRY 100,000 the deduction is TRY 759, leaving TRY 99,241 net. Any amount an employer pays above the ceiling falls outside the exemption and is taxed as ordinary salary.
They are calculated separately and paid together at termination. Severance pays 30 days of the dressed gross wage per full year of service, prorated and capped by the ceiling. Notice pay compensates the notice periods of Labor Law No. 4857, art. 17 — 2 weeks under 6 months of service, 4 weeks up to 1.5 years, 6 weeks up to 3 years, 8 weeks beyond — at the dressed gross wage. Severance bears only 0.759% stamp tax, while notice pay is subject to income tax and stamp tax. Neither attracts social security contributions.