Severance pay is a receivable that must be paid under certain conditions in return for the employee's working time at the workplace. Although the Labor Law No. 4857 has come into force, the provision of Article 14 of the old Labor Law No. 1475 is still in force.
Eligibility Conditions for Severance Pay
- At least 1 year seniority (including probationary period)
- Termination of the employment contract for reasons listed in the law:
- Termination by the employer for reasons other than Labor Law Article 25/II (circumstances contrary to morality and good faith)
- Termination by the employee with Labor Law Article 24 (just cause)
- Termination due to military service for men
- Termination for women due to marriage within 1 year
- Earning retirement rights
- Death of worker (paid to heirs)
- Termination for retirement purposes of a worker who has reached the age of 15 years and has paid 3,600 days of premiums
Calculation Method
30 days of gross wage for each full year is paid. Proportional for periods increasing from one year.
Calculation Formula
Severance Pay = (Last gross salary × 30) × (Years worked + (Months worked/12) + (Days worked/365))
Ceiling Application
The highest retirement bonus ceiling determined for civil servants is applied. This ceiling is updated every year; For fees exceeding this upper limit, only the ceiling amount is taken into account.
Items to be Included in the Account
- Principal wage (gross)
- Jackpot
- Food cost (aid)
- Travel fee
- Fuel aid
- Supply aid
- Educational assistance
- Child raise
- Regular premium payments
Not included: Minimum subsistence allowance, overtime pay, week holiday / general holiday pay, birth-death benefit, leave pay.
Supreme Court 9. HD Approach
The 9th Chamber of the Supreme Court of Appeals emphasizes in many decisions that the concept of "dressed wage" should be used in calculating severance pay and that bare wage is insufficient. In addition, it has been adopted that the premiums paid regularly in the workplace for 2 years or more should be added to the main wage.
Interest
The highest deposit interest is applied to severance pay starting from the date of termination of the employment contract.
Timeout
There is a statute of limitations of 5 years for severance pay (Labor Law Article 32 - last paragraph).
Calculation Example
The worker worked for 5 years, 4 months and 12 days, his last gross wage was 25,000 TL, the total of food, transportation and premiums was 5,000 TL. Dressed fee: 30,000 TL.
Seniority = 30,000 × (5 + 4/12 + 12/365) = 30,000 × 5,366 ≈ 161,000 TL (ceiling check must be made)
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