Pursuant to Circular No. 5 of the Ministry of Treasury and Finance, dated 03/07/2026, the
annual ceiling for severance pay owed to employees has been increased to TRY
73,729.87, effective 1 July 2026. This figure represents a 13.52% increase over the
previous period (1/1/2026-30/6/2026).
Severance pay is calculated on the basis of 30 days' wages for each full year of
employment. However, the law imposes an upper limit (ceiling) on the amount calculated in
this manner. This ceiling is updated twice a year, in January and July, in line with the
coefficient increases applied to civil servant salaries; as civil servant salaries increase, the
severance pay ceiling increases by the same rate. The increase rates are determined by the
Public Employees' Arbitration Board and announced through circulars issued by the Ministry
of Treasury and Finance.
For employees whose employment is terminated on or after 1 July 2026, the upper limit for
the portion of severance pay exempt from income tax will be TRY 73,729.87. If an
employee's calculated severance pay exceeds this amount, the excess portion will not be
exempt from income tax.
We kindly request that you take the new ceiling amount (TRY 73,729.87) into account when
calculating severance pay for terminations occurring after 1 July 2026.
