As of 1 July 2026, the annual ceiling amount for severance pay to be paid to employees in Türkiye has been determined as TRY 73,729.87.
This update was formalized through Circular (Genelge) No. 5, published on 2 July 2026 by Türkiye’s Ministry of Treasury and Finance (Hazine ve Maliye Bakanlığı), General Directorate of Public Financial Management and Transformation. The circular is based on the 2025/1 Public Employees Arbitration Board Decision, published in the Official Gazette dated 27 August 2025, No. 32999.
Comparison with the previous period:
- 1 January – 30 June 2026: TRY 64,948.77
- 1 July – 31 December 2026: TRY 73,729.87 (an increase of approximately 13.52%)
Other official figures included in the circular:
- Civil servant monthly salary coefficient: 1.575512
- Base civil service monthly coefficient: 25.794915
- Supplementary payment coefficient for job difficulty, job risk, and financial responsibility: 0.499649
- Wage ceilings for contracted personnel were also increased by 13.52%
- Net monthly amount for a first-degree, first-step branch manager (şube müdürü): TRY 102,085.23 (effective 1 July 2026)
Tax treatment:
Severance pay within the legal ceiling is exempt from income tax and social security (SGK) premiums. Only a stamp duty of 0.759‰ (7.59 per thousand) applies. If an employer pays above the ceiling, the excess amount is treated as regular wages and becomes subject to income tax.
Application rule:
The new ceiling applies to employment contracts terminated between 1 July and 31 December 2026. For contracts terminated on or before 30 June 2026, the previous ceiling (TRY 64,948.77) still applies — what matters is the date the contract ended, not the date payment is actually made, even if payment is delayed.
Why it matters:
This amount is important for employers when calculating statutory severance pay liabilities, especially in cases of employment termination, retirement, or other situations where severance entitlement arises under Turkish labor legislation. Employers should ensure that payroll, HR, and finance teams apply the updated ceiling correctly in their calculations from 1 July 2026 onward, and companies should also revise the actuarial severance provisions held on their balance sheets to reflect the new ceiling.
