As is known qualified employees are paid a severance pay equal to last 30 days’ gross wage for each full year of employment.
An employee receives various types of payments and in kind benefits in addition to his base salary, so the term "gross wage" can be interpreted differently.
When it comes to the wage that will be a base for severance pay, all "vested employee benefits" should be taken into consideration. Following payments must be included in the calculation of gross wage;
- Gross base salary,
- Contractual and statutory benefits in kind provided by employer such as meal allowance, transportation fee,
- Periodical (annually, quarterly etc.) payments such as premium and bonuses ( that will be added in monthly basis),
- In case the wage is determined as net in the employment contract, the net amount should be grossed up.
On the other hand ad-hoc payments are not into calculation.
Description of wage in Article 61 of Income Tax Law 193 gives an enlightening idea about the gross wage and vested employee benefits,
"Wage is a benefit provided by cash in kind and cash, represented by cash, in return of services performed by employees registered and subject to an employer. It does not change the true nature of wage by paying it under the names of indemnity, allowance, cash compensation (Financial Liability Indemnity), allocation, increment, advance, remuneration, attendance fee, premium, bonus, in return of an expense or determined by a particular percent of revenue provided not to have the attribute of a partnership."
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