What is Severance Pay and How is it Calculated?
Severance pay is a type of labor rights compensation that workers in Turkey can receive when they leave or are laid off by their employers. It is basically based on the worker's length of employment with the employer and is calculated according to the worker's years of service.
Severance Pay Right
According to the Labor Law in Turkey, when an employee is terminated by the employer or voluntarily leaves the job, the employee is entitled to receive severance pay. In order for an employee to be entitled to receive severance pay, the following conditions must be met:
- The worker must have worked with the same employer for at least 1 year.
- Severance pay is paid in cases where the employer dismisses the employee or the employee leaves the job voluntarily.
- In order for an employee to receive severance pay, he or she must leave or be dismissed from work for a justified reason.
Severance Pay Calculation
Severance pay calculation is based on various factors such as the employee's gross wage, length of service and age. The basic formula used for calculation is as follows:
Severance Pay = (Gross Monthly Wage / 30) x (Working Time)
Working hours are expressed in years and months. For example, if a worker has worked for 5 years and 8 months, this period is considered as 5 years.
The age factor varies according to the worker's age and is assumed to be 30 for workers under 50, while it is increased for workers aged 50 and over.
Another factor to be taken into account in calculating severance pay is the employee's last gross monthly wage. The employee's last wage is the gross monthly wage on the date they left or were dismissed.
Severance Pay Payments and Taxation
Severance pay payments are usually made to the worker in multiple installments. Payments are made at rates determined by the number of years the worker has worked. Severance pay payments are made without deductions from the worker's salary and are taxed.
Taxation of severance pay payments is determined by taking into account the amount of severance pay the employee will receive and other income. The amount of severance pay the employee will receive is assessed according to income tax laws and may be subject to tax.
Conclusion
Severance pay is considered an important right for workers in Turkey and requires employers to follow certain rules to protect their workers and to terminate them fairly. Severance pay calculations can be complex, so it is recommended that workers seek legal advice or refer to the Labor Law on this matter.
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