How is unused annual leave paid out when employment ends in Turkey?
When an employment contract in Turkey ends — for any reason, including resignation — the employer must pay out every accrued, unused annual leave day at the employee's final base gross wage (Labor Law No. 4857, Article 59). The amount is the daily base wage times the remaining days, and claims expire five years after termination.
Any termination triggers the payout — resignation included
Unused annual leave converts into a wage claim the moment the employment contract ends. Article 59 of Labor Law No. 4857 covers termination 'for any reason', so it makes no difference whether the employee resigned, was dismissed, or was terminated for cause without severance — every accrued, unused leave day must be paid at the final base gross wage. If the employee dies, the amount is paid to their heirs.
Termination is the only event that converts leave into money: while the contract runs, annual leave cannot be cashed out, because the entitlement itself cannot be waived (Article 53). The year the days were accrued is irrelevant — days earned three years ago are paid at the same final wage as this year's, in one line on the final payroll (Article 59 and settled Court of Cassation practice).
Calculating the amount — and what gets withheld
The calculation has two steps: divide the monthly base gross wage ('çıplak brüt') by 30 to get the daily wage, then multiply by the number of unused leave days. Base gross means the core wage only — overtime pay, bonuses, and social benefits are excluded (Article 57). Example: an employee with a 60,000 TRY base gross salary and 10 unused days is owed 60,000 ÷ 30 × 10 = 20,000 TRY gross.
The payout is gross and is taxed as ordinary wage income: income tax and stamp tax are withheld, and in SGK (social security) practice it is included in the premium base. Unlike Turkish severance pay, it carries no income-tax exemption — a point that matters when modeling exit costs for employees in Turkey.
The five-year clock and the notice-period trap
Claims for unused-leave pay expire five years after the termination date (Additional Article 3 of Law No. 4857, added by Law No. 7036) — and the clock starts only at termination (Article 59). Leave therefore never lapses during employment: a fifteen-year employee's entire accumulated balance falls due on their last day, which makes untracked balances a real off-boarding liability for employers in Turkey.
When the employer terminates, the statutory notice period may not overlap with annual leave (Article 59): an employer cannot place a departing employee 'on leave' during notice to burn down the balance. Notice, paid job-search hours, and annual leave are separate entitlements, and unused leave is still paid out in cash.
| Legal basis | Labor Law No. 4857, Art. 59 |
| Pay basis | Final base gross wage ('çıplak brüt') |
| Formula | Daily base wage × unused days |
| Daily wage | Monthly base gross ÷ 30 |
| Scope | Any termination — resignation included |
| Limitation | 5 years from termination date |
| Tax | Income tax + stamp tax withheld |
| Social security | In SGK premium base (practice) |
Frequently asked
Yes. Article 59 of Labor Law No. 4857 applies to termination for any reason, with no distinction between resignation, dismissal, or termination for cause. An employee who resigns usually forfeits severance pay, but never the payout for accrued, unused annual leave — it is paid at the final base gross wage.
All unused leave days — whatever year they were earned — are paid at the base gross wage in effect on the day the contract ends (Labor Law No. 4857, Article 59). There is no indexation to the salary of the year of accrual. The final wage governs the entire balance.
The unused-leave payout at termination is treated as wage income: income tax and stamp tax are withheld, and SGK practice includes it in the social-security premium base. It does not benefit from the income-tax exemption that applies to Turkish severance pay, so it should be budgeted gross on the final payslip.
No. When the employer terminates the contract, Labor Law No. 4857 Article 59 bars overlapping the statutory notice period with annual leave. Remaining leave days cannot be absorbed into notice. They are either taken separately before notice begins or paid out in cash at the final base gross wage.