As of July 1, 2020, the severance pay ceiling is determined to be 7,117.17 TL for the second half of the year, with an increase of 5.75 percent.
How Is The Severance Pay Ceiling Determined?
Severance pay is calculated by adding the last gross salary of the employee and the cash and in-kind benefits that are continuously paid throughout the year. If the total sum of the wage plus benefits is greater than the severance pay ceiling, the severance pay ceiling is taken into account. When the total sum is less than the severance pay ceiling, the wage plus benefits is taken into account. The gross amount of severance pay is obtained by proportioning the amount to be calculated according to the seniority period of the employee. It is important to remember that severance pay is only subject to a stamp duty payment.
The maximum amount of severance pay, updated every 6 months, in January and July, does not exceed the maximum retirement pension of the highest civil servant for a year of service. The retirement pension paid to the highest civil servant for a service year is determined based on the civil servant salary coefficient. The severance pay ceiling is determined by the Revenue Administration Directorate (GIB). The previous severance pay for January 1, 2020 to June 30, 2020 was 6,730.15 TL.