Under Article 17 of the Turkish Labor Law, employers are mandated to provide statutory notice prior to terminating an indefinite employment contract. This legal provision serves as a safeguard for employees, protecting them from abrupt cessation of employment and the consequent loss of income. The law specifies minimum notice periods based on the length of the employee’s service, ensuring that employees are afforded time to seek new employment while still receiving their salary.
The notice periods are specified under Article 17 of the Turkish Labor Law. The minimum notice periods are determined on the basis of the length of employment as follows:
| Less than six months of employment | (2) two weeks – 14 days |
| Between (6) six months and (18) eighteen months of employment | (4) four weeks – 28 days |
| Between (18) eighteen months and (36) thirty-six months of employment | (6) six weeks – 42 days |
| More than (3) three years of employment | (8) eighth weeks – 56 days |
In cases where the employer opts to terminate the contract immediately, they are required to make a payment in lieu of notice, equivalent to the term of the notice period. This provision underlines the importance of maintaining a balance between the employer’s right to terminate employment and the protection of employee rights, ensuring that employees are not left financially vulnerable due to abrupt termination.
Contrastingly, for definite-term contracts, where the expiration date of the contract is explicitly or implicitly agreed upon, a notice of termination is not necessitated due to the automatic expiration of the contract. [1]
In calculating notice pay, the gross notice pay is determined by multiplying the employee’s gross salary with the notice period. In the calculation of notice pay, the term “gross salary” refers to a comprehensive wage figure that includes all continuous rights and payments made to the employee. This means that the gross salary used in the calculation is not just the basic salary, but it encompasses various additional benefits and compensations that are regularly provided to the employee. These may include bonuses, allowances, and other regular payments that form part of the employee’s total earnings.
Gross Notice Pay = Gross Salary (daily) * Notice Period (#days)
This amount is then subject to income tax and stamp tax deductions, resulting in the net notice pay. The progressive income tax rates in Turkey are:
- Up to 110,000 TL: 15%
- For the amount exceeding 110,000 TL, up to 230,000 TL: An initial 16,500 TL plus 20% on the excess over 110,000 TL
- For the amount exceeding 230,000 TL, up to 870,000 TL: An initial 40,500 TL plus 27% on the excess over 230,000 TL
- For the amount exceeding 870,000 TL, up to 3,000,000 TL: An initial 213,300 TL plus 35% on the excess over 870,000 TL
- For the amount exceeding 3,000,000 TL: An initial 958,800 TL plus 40% on the excess over 3,000,000 TL
Stamp tax is calculated at a fixed rate of 0.00759 on the gross salary.
Net Notice Pay is calculated by subtracting the income tax and stamp tax from the gross notice pay:
Net Notice Pay = Gross Notice Pay – Income Tax – Stamp Tax
[1]Art. 430, Turkish Code of Obligations No. 6098, Court of Cassation 9th Civil Chamber, 2004/4300 E.- 2004/16295 K., dated 01.07.2004.
Explore additional resources about Turkish severance pay in our related guides.
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