In Turkey, terminating an employment relationship requires more than a termination letter. Also decide the departure reason, comply with statutory notice, and correctly calculate entitlements. This approach minimizes the chance of a reinstatement claim.
For international companies, meeting these obligations can be challenging. This occurs when an employee is engaged via an Employer of Record (EOR). The following guide outlines the key elements of terminating an employee in Turkey, the costs that need to be planned for, and the steps which enable a controlled and compliant offboarding procedure.
What is the process of dismissing employees in Turkey?
The process of terminating an employee’s employment and closing their payroll account is offboarding. This includes their documentation, access rights, and the requirement to hand over information. In Turkey, a proper offboarding process begins before the employee is informed.
Employers should decide the exit method first. Options include resignation, mutual agreement, ordinary termination with notice, or payment in lieu of notice. The choice may occur at the end of a fixed-term contract or as immediate termination for a valid reason. The method in question has an impact on both the financial calculation and the documents that are needed.
Begin by looking at the reason for termination and the employment status.
When the employer initiates termination, examine the reason. Consider the employee’s contract type, tenure, workplace size, and statutory protections. Specifically, employees who are protected by job-security regulations may have extra procedural rights and the right to challenge their dismissal.
Before communicating a decision, confirm:
- whether the contract is indefinite-term or fixed-term;
- the employee’s length of service and notice period;
- whether the employee may qualify for severance pay;
- the verified balance of unused annual leave;
- any unpaid salary, overtime, bonus, or expense items; and
- If the rules concerning job security and reinstatement do apply.
This initial review avoids the usual error. The termination payment is not a single figure; it comprises multiple legal and payroll items.
The main costs of terminating an employee in Turkey
In a typical exit arranged by an employer, three main components exist. They are severance pay, notice pay, and payment for unused annual leave. The salary base differs for the three payments. Each type needs independent tax and payroll evaluation. This applies to severance pay, notice pay, and unused leave.
Severance pay in Turkey
Severance pay is not payable in all departure cases. It usually takes effect after at least one year of service when the employer ends the employment relationship. However, immediate termination for misconduct, as provided in Article 25/II of Labour Law No. 4857, is an exception. Additionally, some exits initiated by the employee may be eligible, for example, those following the statutory procedures for resignation.
For budgeting purposes, the usual starting point is:
Gross severance pay equals the lower value between the employee’s qualifying monthly gross pay and the cap multiplied by completed service years. It is the alternate value when the cap applies.
Partial years are usually prorated. The appropriate cap is the one in effect on the date the relationship ended. Therefore, it is necessary to check this again before the final payroll is processed.
What salary is taken into account when calculating severance pay?
The calculation usually begins with the employee’s most recent monthly gross wage before deductions. Regular cash or cash-equivalent benefits, such as meal allowances, transportation assistance, and regular bonuses, may be included. One-off or irregular payments require a case-by-case review.
That is the reason why an employer should not arrive at a figure for severance pay based solely on the net salary; in order to calculate it accurately the actual gross wage and a full record of recurring benefits are needed.
Notice pay in Turkey
With indefinite-term contracts, the terminating party must provide the statutory notice period. The employer may terminate immediately by paying the employee the amount equal to the notice period. This remains valid only if certain conditions are met.
The minimum notice periods required by Labour Law No. 4857 are:
| Less than 6 months | 2 weeks / 14 days |
| 6 months to under 18 months | 4 weeks / 28 days |
| 18 months to 3 years | 6 weeks / 42 days |
| More than 3 years | 8 weeks / 56 days |
The contractual notice periods can be longer, and if the notice is paid in lieu then the budgeting formula is generally:
Gross notice pay = (gross salary including regular benefits / 30) x applicable notice days
Notice pay, unlike severance pay, is not covered by the statutory severance limit. If the employee stays at work during the notice period, their normal salary and benefits will continue. Employers should also bear in mind that notice given by the employer and annual leave cannot be considered as overlapping periods.
Unused annual leave on termination
Earned but unused annual leave must be paid when an employment contract ends. The payment goes to the employee, or, where applicable, to their legal beneficiaries. Calculation should be based on the confirmed leave balance, including carried over leave. The calculation should be based on the confirmed leave balance, this including any valid leave that has been carried over.
For budgeting, the standard formula is:
Gross unused-leave pay = (last monthly gross basic salary / 30) x unused annual-leave days
This payment is usually calculated on gross basic salary. It is not based on gross wage plus regular benefits, unlike severance and notice payments. It is important to keep a record of leave taken, since inaccurate balances are a common cause of disputes that can be avoided.
Additional exit costs to include in the budget
The three main payments do not include all the exit costs, and a full termination budget might also have to include:
- unpaid salary through the final day of employment;
- earned but unpaid bonuses, commissions, or overtime;
- reimbursable business expenses;
- employer-side payroll contributions and deductions as applicable;
- legal, mediation, settlement, interest, or court costs where a dispute arises; and
- any payment required by contract or client reimbursement duty under an EOR service agreement.
Before the notification is issued, prepare the calculation sheet and then have the payroll department and local legal counsel check the figures before they are released.
Protecting against reinstatement claims in Turkey
The employer’s total exposure includes only the financial cost of the exit; a dismissal without a valid reason or one that fails to follow the required procedure may result in a reinstatement claim.
At what stage can job-security protections be applied?
The job-security provisions in Labour Law No. 4857 apply to indefinite-term contracts. They apply if the company has 30 or more employees and the employee has at least six months of service. However, certain senior representatives of the employer are excluded, and the employer must ensure the grounds are valid and written. The employer must then make sure that the grounds for dismissal are valid, properly supported by evidence and clearly set out in writing.
In the case of dismissals which are based on an employee’s conduct or performance, it may be necessary to have the employee’s defence obtained before the dismissal takes place. The risk can be greatly increased if the performance case is not supported, the written notice is unclear, or the evidence is weak.
Key deadlines and possible outcomes
An employee who is challenging the validity of their dismissal must apply for mediation within one month of receiving the notice of termination. If the dispute cannot be settled through mediation, a lawsuit may generally be brought within two weeks of the last mediation record.
If a dismissal is found invalid and the employee makes a timely return-to-work application, exposure can include:
- up to four months’ gross wages and benefits for the period not worked; and
- If the employer does not reinstate the employee, the employee will receive four to eight months’ gross basic wages.
After the final decision has been made, the employee has 10 working days in which to apply for a return to work. The employer then has a month in which to reemploy the employee. Where statutory set-offs and adjustments to the termination payments are in question, the final figure must be subject to a specific legal and payroll review.
A compliant offboarding process in Turkey: step by step
1. Make sure the correct legal procedure has been followed before telling the employee.
Make sure that the reason for the exit is properly classified and check that the proposed reason, procedure, and timeline are in line with both the contract and the requirements of Turkish employment law. Do not replace a genuine and informed agreement with a mutual separation document. When dealing with an EOR arrangement, coordinate the positions of the client, the legal employer, and the local adviser before making the announcement.
2. Prepare a written record of the termination
Keep the employment contract, the payroll records, the benefit records, the leave balance, any performance or disciplinary evidence, the previous warnings, and the draft written notice. Having a complete file ensures the accuracy of any calculations and provides the employer with a defensible record should the decision be challenged.
3. Work out each payment individually.
When preparing the figures, use the employee’s real gross payroll data rather than making an estimate based on net salary. Severance pay, notice pay, any unused leave, unpaid wages, and any variable form of remuneration should all be listed separately. Make sure that the statutory severance cap that was in effect on the date of exit is confirmed and that the correct salary basis is applied to each item.
Make sure that your written communications are clear.
The notice of termination must be clear, in line with the legal approach adopted, and properly delivered; it should not contain any vague statements or reasons that cannot be justified. The employee should know their final day of work, the details of the notice period, the matters relating to payment, the steps they need to take during the handover, and who to contact regarding payroll documentation.
Carry out the payroll, social security, and access procedures.
Make sure the final payroll is processed on time, carry out the appropriate termination notifications, and keep evidence of the payment. In the meantime, handle the operational exit by recovering company property, removing system access, protecting confidential data, and securing a structured knowledge handover.
After leaving, keep a record that is ready for use in the event of a dispute.
Keep secure copies of the signed documents, payment evidence, the calculations, the correspondence, and any records from mediation. Having a clear paper trail makes it simpler to deal with a claim if one is made after someone has been offboarded.
How EOR offboarding works in Turkey
While an EOR can make the administration of cross-border employment easier, it still requires a careful procedure when terminating an employee. Since the EOR acts as the local legal employer, it usually takes charge of the employment records, payroll, and any statutory obligations. The client company must provide clear instructions early on so that the EOR can evaluate the appropriate course of action, work out the costs, and arrange the necessary communications in a legally sound manner.
What the client company should provide to the EOR
In order to ensure that the offboarding process during the end of employment runs smoothly, it is necessary to provide the employee with the suggested reason and date of exit, together with the relevant performance or conduct records, any changes to the contract, details regarding bonuses or commissions, information about leave, and any requirements concerning the return of company assets. However, do not give the employee a promised termination date or a specified payment amount before the EOR has finished its local review.
Why early cost planning matters
A single estimate of the exit costs could enable an international employer to compare different options, plan his or her cash flow, and prevent any surprises. It would also establish a single point at which severance, notice, leave, payroll treatment, and any possible dispute exposure can be reviewed.
Common employee-termination mistakes to avoid
Assuming every payment uses the same salary basis
The amounts for severance, notice, and unused annual leave are not computed in precisely the same manner, and it would be possible to end up with either an underpayment or an overpayment if a single gross-salary figure is used for each line.
Giving notice before the calculation and evidence review
After the notice has been given, the employer will have very little opportunity to remedy an unclear reason, incomplete documentation, or an inaccurate payment estimate. The procedure should be to carry out the review first and then to communicate it.
Letting annual leave overlap with employer-given notice
You cannot use your annual leave to make up for the notice period that the employer is required to give; you should treat these two obligations as separate and then calculate the amount of annual leave that is left when you are leaving.
Underestimating reinstatement risk
The payment of notice does not stop someone from bringing a challenge relating to reinstatement. In cases where job-security rules are in question, it is necessary to have a good reason, a written procedure, and properly organised evidence.
A list of common questions concerning offboarding in Turkey.
Do all employees in Turkey get severance pay when they leave?
Eligibility is determined by the method of termination, the length of the employee’s service, and the legal grounds for leaving. In the case of a termination initiated by the employer, a period of at least one year’s service is generally necessary, and if the dismissal is based on misconduct as specified in Article 25/II, severance pay will not be awarded. Likewise, other types of statutory qualifying exits can result in entitlement.
Can an employer choose to give notice rather than ask the employee to work it?
With an indefinite-term contract the employer is usually able to terminate the employment by paying in advance the notice pay required, rather than having the employee serve the notice period. However, it is necessary to check the proper procedure and any exceptions before taking action.
Does annual leave that has not been used have to be paid when employment ends?
Yes, when the employment contract comes to an end, any annual leave that has been earned but not taken must be paid to the employee at their wage on the date of termination; therefore, the unused leave balance should be checked and recorded prior to the final payroll.
For how long does an employee have to challenge their dismissal?
For a reinstatement claim, the employee must apply to mandatory mediation within one month of the termination notice. If no agreement is reached, the next procedural deadline is generally two weeks from the final mediation record.
Plan the exit before giving notice.
Employee termination in Turkey is best managed as a structured compliance project rather than a last-minute payroll task. Early planning gives employers time to confirm the legal route, calculate each entitlement correctly, prepare evidence, and protect the business against avoidable claims.
Gini Talent helps international employers coordinate compliant employment and EOR offboarding in Turkey. Contact our team for a case-specific exit-cost estimate and local process support before communicating a termination decision.
