Severance pay is a compensation paid by the employer for each year an employee works at the workplace. According to Article 45 of the Labor Law, severance pay is paid to the employee in case the employment contract is terminated due to the employer.
Severance Pay Calculation:
When calculating severance pay, it is necessary to follow these steps:
1. Determination of Working Time:
The time the worker works at the workplace is divided into months and years.
Year fractions are also taken into account in calculating severance pay.
For example, the working period of a worker who has worked for 2 years and 6 months is considered as 30 months.
2. Determination of the Dressed Gross Wage:
In addition to the worker’s last gross salary, the adjusted gross wage also includes items such as travel, food and lodging.
The quantities of these items vary depending on the employer’s workplace practices.
3. Calculation of Daily Wage:
Daily wage is calculated by dividing the gross wage by the number of days worked.
Daily wage = Dressed Gross Wage / Number of Days Worked
4. Calculation of Severance Pay Amount:
For each year, the daily wage is multiplied by 30.
For fractions of a year, the monthly wage is calculated by dividing the daily wage by the number of months worked.
The monthly wage is multiplied by 30 to find the severance pay amount accrued for that year.
