Severance pay 2026: conditions, the gross-up wage and the ceiling
Who gets severance, what goes into the grossed-up wage, the 2026 ceilings, income tax and stamp duty, payment timing and interest; with worked examples.
Severance pay is paid to an employee whose contract ends for certain reasons and who has worked at least one year for the same employer: 30 days' wages for each full year. It is still calculated under article 14 of the old Labour Law No. 1475.
Who gets it?
| Situation | Severance |
|---|---|
| Employer terminates without just cause | Yes |
| Employer terminates for health or force majeure (art. 25/I, III) | Yes |
| Employer terminates for the employee's breach of morality and good faith (art. 25/II) | No |
| Employee terminates for just cause (art. 24: unpaid wages, mobbing etc.) | Yes |
| Employee resigns | No |
| Retirement, or meeting all retirement conditions except age | Yes |
| Military service | Yes |
| Female employee leaving within 1 year of marriage | Yes |
| Death | Yes (to heirs) |
| Expiry of a fixed-term contract | Yes (Court of Cassation practice) |
Link to exit codes: Termination codes.
Grossed-up wage
Severance is calculated on the "grossed-up wage": the last gross wage plus regularly paid benefits measurable in money:
- Included: meal, transport, shuttle value, regular bonuses and premiums (1/12 of the annual amount), child and family allowances, fuel allowance, housing allowance, private health insurance premium.
- Excluded: overtime, occasional payments, one-off payments such as birth and death aid, a car and phone provided for work.
Ceiling
The grossed-up wage cannot exceed the ceiling on the termination date:
| Period | Ceiling |
|---|---|
| 01.01.2026 – 30.06.2026 | TRY 64,948.77 |
| 01.07.2026 – 31.12.2026 | TRY 73,729.87 |
The ceiling is linked to the highest retirement bonus paid to civil servants and is updated twice a year with civil servant pay rises.
Tax
Severance is exempt from income tax (up to the ceiling) and not subject to SGK premiums. Only 7.59 per thousand stamp duty is deducted.
Example 1: below the ceiling
Seniority 4 years 6 months, grossed-up gross wage TRY 50,000.
- 4 years: 50,000 × 4 = TRY 200,000
- 6 months: 50,000 × 6 ÷ 12 = TRY 25,000
- Gross severance TRY 225,000; stamp duty TRY 1,707.75; net TRY 223,292.25
Example 2: ceiling applies
Seniority 10 years, grossed-up gross wage TRY 120,000, termination September 2026.
- Wage for calculation limited to the ceiling: TRY 73,729.87
- Gross severance: 73,729.87 × 10 = TRY 737,298.70; stamp duty TRY 5,596.10
Severance, notice and leave calculator · Notice period
Payment and interest
Severance is due on termination; if paid late, the highest interest rate on deposits applies. Payment in instalments is only possible with the employee's express consent. The limitation period is 5 years; mediation is mandatory before suing.
For employers
A severance provision may be booked in accounts, but for tax it is deducted in the year paid. For long-serving employees we estimate the annual liability and include it in cash planning. Payroll and social security