Severance pay is an important right that employees are entitled to when they leave their jobs. In this article, we will discuss the severance pay calculation method and the conditions for entitlement in detail.
What is Severance Pay?
Severance pay is a money paid by the employer for each year the employee works at the workplace. This compensation is designed to compensate the employee for their financial losses when they leave their jobs and to continue their livelihood until they find a new job.
How is Severance Pay Calculated?
Severance pay is calculated based on the employee’s gross wage, seniority and the period they are insured. The calculation is as follows:
For each full year worked: 30-day amount of gross wage
For fractions of years: Multiply gross wage by the number of days remaining in that year in 365
Example:
Let’s say a worker has worked for 5 years and their last gross wage is 5,000 TL. The severance pay amount for this worker is calculated as follows:
For full years: 5 years * 5,000 TL/month * 30 days/month = 75,000 TL
For fractions of years: Let’s say the worker leaves work on the 15th of the 6th month. In this case, the remaining time is 15 days of 6 months, i.e. 195 days. 195 days / 365 days * 5,000 TL/month * 30 days/month = 13,157.89 TL
Total severance pay: 75,000 TL + 13,157.89 TL = 88,157.89 TL
Seniority Pay Entitlement Conditions
In order to receive severance pay, the worker must meet certain conditions. These conditions are as follows:
Having worked for at least one year: The worker must have worked as an insured employee at the workplace for at least 1 year.
Not leaving work voluntarily: The worker must have left work due to the employer’s fault or an important reason experienced at the workplace. These situations include dismissal, the employer terminating the employment contract, workplace mobbing or harassment.
Not giving notice compensation: The employer must not have given the legal notice period regarding the worker’s departure or must not have paid the notice compensation.
Things to Consider About Severance Pay
Severance pay must be paid on the date the worker leaves work.
Stamp duty is deducted from the severance pay.
In case of any dispute regarding severance pay, workers can apply to the Labor Courts.
