What Severance Pay Rules Must Employers Follow in Turkey?

Which Employees Qualify for Severance Pay?

• Employees working under an indefinite-term employment contract who have completed at least one year of continuous service with your company.
• Employees whose employment ends due to termination by the employer without just cause under Turkish Labor Law.
• Employees who resign for justified reasons recognized by law, such as serious health issues or the employer’s immoral or dishonorable conduct.
• Male employees leaving to perform compulsory military service and employees retiring by meeting social security conditions, including old-age or disability pension.
• Female employees who resign within one year of marriage, provided they submit proper documentation.
• Employees whose contracts end due to the employer’s bankruptcy, workplace closure, or change of ownership that triggers severance rights under the law.

What Are the Legal Timelines for Paying Severance?

Under Turkish practice, you are expected to pay severance on the effective termination date or within a very short, reasonable period immediately after the end of employment. Courts and inspectors generally view delays unfavorably, especially where the employee is left without income. Many employers settle severance together with the final salary, unused annual leave pay, and other termination entitlements in a single payment. To reduce dispute risk, have the employee sign a detailed release (ibraname) only after full and timely payment. If you anticipate any delay, document the reason and payment plan in writing and obtain the employee’s written acknowledgment.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Turkey, you risk labor court claims, statutory interest, and additional financial exposure. Employees can challenge both the amount and the grounds for termination, and courts tend to interpret protective rules in favor of employees. Non-compliance can also trigger audits by the Social Security Institution and the Ministry of Labor, damaging your reputation and bargaining position in any dispute.

• Employees can file lawsuits to recover unpaid severance, with default interest accruing from the termination date.
• Courts may award court costs and attorney fees against your company if the employee’s claim is upheld.
• Improper termination may expose you to reinstatement claims and compensation of up to several months of salary.
• Repeated or systemic non-compliance can attract closer scrutiny from labor inspectors and social security authorities.
• Disputes over severance can delay workforce restructuring and increase settlement amounts you must pay to close cases.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (https://www.playroll.com/employer-of-record) in Turkey does not eliminate the underlying legal requirement to pay severance when statutory conditions are met. In most EOR models, the EOR is the formal employer on paper and is responsible for calculating and paying severance under Turkish law. However, your company typically bears the economic cost through your service fees and must fund any severance obligations triggered by your business decisions. If the EOR mishandles severance, employees may still pursue claims, and you could face contractual liability toward the EOR and reputational risk. Clear allocation of responsibilities in the EOR agreement and transparent communication on termination decisions are essential.

Be 100 Percent Compliant in Offering Severance with Playroll

Managing severance in Turkey requires you to track each employee’s start date, contract type, wage history, and reason for termination with precision. Playroll helps your team centralize this data, apply the correct statutory severance ceiling, and distinguish between situations that trigger severance and those that do not. You get clear breakdowns of accrued entitlements, estimated costs, and documentation templates that align with Turkish Labor Law.

With Playroll, you can also coordinate timing so that severance, final salary, and unused leave are paid together, reducing the chance of disputes or claims for late payment interest. Our experts work with your HR and legal teams, or your Employer of Record partner, to structure compliant termination workflows, prepare settlement and release documents, and maintain an auditable trail. That way, your company can restructure or exit employees in Turkey confidently while staying on the right side of regulators and the courts.