Who pays and which taxes apply?
The employer pays all three items; there is no state severance fund. Their tax and premium treatment differs:
| Payment | Social security | Income tax | Stamp duty |
|---|---|---|---|
| Severance pay (kıdem) | No | No (exempt up to the cap) | Yes (0.759%) |
| Notice pay (ihbar) | No | Yes (added to the cumulative base) | Yes |
| Unused annual leave pay | Yes (employee 15%, employer 23.75%) | Yes | Yes |
The employer withholds and pays these via the monthly withholding and premium return.
Severance pay
Condition: at least 1 year with the same employer, and termination for a reason that creates the right (dismissal by the employer, resignation for just cause, retirement, military service, a woman leaving within 1 year of marriage, death).
Calculation: 30 days' gross pay including regular benefits for each full year, pro rata for the rest. Regular benefits such as meals, transport, bonuses and premiums are added at their monthly value.
Cap: this pay cannot exceed the cap at the exit date: 64 948,77 TL for 01.01–30.06.2026 and 73 729,87 TL for 01.07–31.12.2026.
Notice pay
A party that terminates an indefinite contract without notice pays the other side the wage for the notice period. The employee is owed it when the employer dismisses without notice; the employer when the employee resigns without notice.
| Service | Notice period |
|---|---|
| Under 6 months | 2 weeks |
| 6 months – 1.5 years | 4 weeks |
| 1.5 – 3 years | 6 weeks |
| Over 3 years | 8 weeks |
Notice pay has no cap; it is based on gross pay including regular benefits.
Unused annual leave pay
Whatever the reason for termination (including resignation), unused leave days are paid at the last gross wage. Daily wage = monthly gross ÷ 30. Entitlement: 1–5 years 14 days, 5–15 years 20 days, 15+ years 26 days; at least 20 days for employees aged 18 or under or 50 or over. Annual leave guide · Annual leave calculator.
Example
Employee hired on 01.03.2020, dismissed without notice on 31.10.2026, gross TRY 60,000 + TRY 5,000 regular monthly benefits, 8 leave days left:
- Service 6 years 8 months → notice 8 weeks.
- Pay with benefits TRY 65,000, below the cap (73,729.87).
- Severance ≈ 65,000 × 2,437 days ÷ 365 ≈ TRY 434,000 gross; only stamp duty is deducted.
- Notice = 65,000 ÷ 30 × 56 ≈ TRY 121,333 gross; income tax and stamp duty deducted.
- Leave = 60,000 ÷ 30 × 8 = TRY 16,000 gross; social security, income tax and stamp duty deducted.
Use the tool above for exact figures; it estimates tax on notice and leave pay with the cumulative base up to the exit month.
Frequently asked questions
Do I get severance if I resign? No — unless the resignation is for just cause (unpaid wages, mobbing, under-reporting to SGK). Resignation and just cause.
I meet the retirement conditions; can I claim severance? Yes, if you document with an SGK letter that you meet all conditions other than age (premium days and insurance period) and then leave.
Limitation period? 5 years for severance, notice and leave pay; mediation is mandatory before a lawsuit.
Legal basis
Law No. 1475 art. 14 (severance); Law No. 4857 art. 17 (notice), arts. 53–59 (annual leave); Income Tax Law art. 25/7 (severance exemption); Law No. 5510 art. 80; Ministry of Treasury and Finance severance cap circulars.