What is Turkey's severance pay ceiling (kıdem tazminatı tavanı)?
Turkey caps statutory severance pay per year of service: under Article 14 of former Labor Law No. 1475, no year of service may pay more than the highest civil servant's maximum one-year retirement bonus — TRY 73,729.87 for 1 July – 31 December 2026. The ceiling resets every January and July with the civil-servant pay coefficient.
Why a ceiling exists — and how it is set
Turkish severance (kıdem tazminatı) accrues at 30 days' gross pay per full year of service, so the law ties a cap to it: under Article 14 of former Labor Law No. 1475 — kept in force by Law No. 4857 — the amount payable for any single year of service cannot exceed the maximum retirement bonus paid to the highest-ranking civil servant for one year. Because that bonus is computed from the civil-servant pay coefficient, the ceiling moves automatically whenever the coefficient is reset: every January and July through the Ministry of Treasury and Finance's fiscal and social rights circular, and mid-period if civil-servant pay receives an extra raise.
For 1 July – 31 December 2026 the ceiling is TRY 73,729.87 per year of service. In the first half of 2026 it was TRY 64,948.77. The current figure is announced in the ministry circular each January and July, which is also how you track it year by year. For payroll purposes the ceiling that matters is the one in force on the termination date — not the hire date, and not an average across the years served.
How the cap applies to the calculation
Statutory severance is computed on the 'dressed' gross wage (giydirilmiş ücret) — the final salary plus regular benefits such as meal and transport allowances. If that dressed wage is at or below the ceiling, each year of service pays the actual wage. If it is above, each year pays the ceiling instead. The cap limits the per-year unit, not the total: a ten-year employee with a dressed wage of TRY 90,000 leaving in late 2026 receives 10 × TRY 73,729.87 = TRY 737,298.70, while a colleague on TRY 50,000 receives 10 × TRY 50,000 = TRY 500,000. Fractions of a year are prorated on the same basis.
Paying above the ceiling — and what to budget
A private-sector employer may contractually pay severance above the ceiling, but the tax treatment splits: under Article 25/7 of Income Tax Law No. 193 the income-tax exemption covers only the portion up to the ceiling, and the excess is taxed as ordinary wage income. Within the statutory amount, only stamp tax at 0.759% is withheld. For budgeting a Turkish workforce, the rule of thumb is one dressed gross month per employee per year of service, capped at the current ceiling — an accruing liability worth modelling from the first hire, especially for senior salaries that sit above the cap.
| Ceiling (1 Jul – 31 Dec 2026) | TRY 73,729.87 per year of service |
| Previous period (1 Jan – 30 Jun 2026) | TRY 64,948.77 |
| Reset dates | Every January and July, via the civil-servant pay coefficient |
| Legal basis | Article 14, former Labor Law No. 1475 (kept in force by Law No. 4857) |
| The rule | Capped at the highest civil servant's maximum one-year retirement bonus |
| Tax treatment | Income-tax exempt up to the ceiling (Art. 25/7, Law No. 193), the excess taxed as wage, 0.759% stamp tax |
Frequently asked
The kıdem tazminatı tavanı is the legal ceiling on Turkish statutory severance: the amount payable for one year of service cannot exceed the highest civil servant's maximum one-year retirement bonus (Article 14, former Labor Law No. 1475). For 1 July – 31 December 2026 it is TRY 73,729.87, and employees whose dressed gross wage exceeds it accrue severance at the ceiling rather than at their actual wage.
The ceiling is indexed to the maximum retirement bonus of Turkey's highest-ranking civil servant, which is computed from the civil-servant pay coefficient. The Ministry of Treasury and Finance resets that coefficient by circular every January and July, so the severance ceiling changes on the same dates — and again mid-period if civil-servant pay receives an extra raise. The applicable figure is always the one in force on the termination date.
When the dressed gross monthly wage exceeds the ceiling, each full year of service pays the ceiling amount instead of the actual wage, with fractions of a year prorated. An employee with ten full years leaving in the second half of 2026 on a wage above the cap receives 10 × TRY 73,729.87 = TRY 737,298.70. The employee's real salary continues to govern everything else — notice pay, unused-leave pay and ordinary payroll.
A private-sector employer may agree, by contract or collective agreement, to pay severance above the statutory ceiling. The income-tax exemption in Article 25/7 of Law No. 193, however, stops at the ceiling: the portion above it is taxed as ordinary wage income, so a gross above-cap promise delivers less net than the exempt statutory amount per lira.
The authoritative source is the fiscal and social rights circular the Ministry of Treasury and Finance publishes each January and July, which fixes the civil-servant pay coefficient the ceiling is computed from. Each circular sets the figure for the following six-month window — TRY 64,948.77 for the first half of 2026, TRY 73,729.87 for the second — and any severance calculation should use the window covering the termination date.