What Is Severance Pay?
Definition
Severance Pay (Kıdem Tazminatı): A lump sum an employer pays a worker whose contract ends for a reason the law or the contract covers. It usually grows with years of service and is based on the last gross wage.
Severance pay is a lump sum an employer owes a worker whose employment ends for a reason the law or the contract covers, such as dismissal without cause. It usually grows with the years of service and is based on the last gross wage. Many countries set a minimum length of service and a ceiling on the wage used.
Where it appears in the formulas
The severance pay calculator uses gross severance pay = min(gross wage + benefits; ceiling) × (years + months/12 + days/365), with the ceiling in force on the end date. Extra months and days count pro rata.
Severance pay and notice pay
Severance pay rewards the length of service and needs at least one year. Notice pay (ihbar tazminatı) is owed by the side that ends the contract without the notice period, with no one-year condition. Both can be due on the same termination.
In Türkiye
Severance pay (kıdem tazminatı) is owed by a Turkish employer to a worker who has served at least one year and whose contract ends for a reason the law lists (Law 1475 art. 14). Each full year of service earns 30 days of gross wage; extra months and days count pro rata. The monthly wage used cannot exceed the severance ceiling. No income tax or social security premium is withheld; only stamp duty of 7.59 per mille in 2025 and 2026 (Law 488).