How Is Notice Pay Calculated? A Step-by-Step Guide with Current Amounts
When an employment contract is terminated, one of the issues that causes the most uncertainty for both employer and employee is notice pay. Where a contract is terminated without observing the notice periods, an incorrect or incomplete calculation can leave the parties with serious financial liabilities.
In this guide you will find the steps for calculating notice pay, the current notice periods by length of service, tax deductions and the key practical points to watch.
🚀 At a Glance
Length of service determines the notice period: The notice period is 2 weeks for less than 6 months of service, 4 weeks for 6 months to 1.5 years, 6 weeks for 1.5 to 3 years and 8 weeks for more than 3 years.
The calculation is based on the gross wage including benefits: Recurring payments such as travel, meal allowances and regular bonuses are also included.
The formula is simple: Daily gross wage including benefits × the number of days matching the notice period (14, 28, 42 or 56 days).
It is a two-way obligation: It is not only the employer who pays; the employer can also claim notice pay from an employee who resigns without giving notice.
What Is Notice Pay?
Notice pay is the compensation that the party wishing to terminate the employment contract (employer or employee) must pay to the other party if it ends the contract without observing the notice period set out in Article 17 of Labour Law No. 4857. The notice period is a preparation period that allows the other party to find a new job or a new employee; if it is not observed, the wages for that period are paid as compensation.
Notice pay is a separate entitlement from severance pay. There is no minimum length of service — an employee who has worked for less than 6 months can also be entitled to notice pay if the conditions are met.
How Many Days Are the Notice Periods by Length of Service?
Under the Labour Law, notice periods vary with the employee's length of service at that workplace:
Length of Service | Notice Period | In Days |
Less than 6 months | 2 weeks | 14 days |
6 months – 1.5 years | 4 weeks | 28 days |
1.5 years – 3 years | 6 weeks | 42 days |
More than 3 years | 8 weeks | 56 days |
These are the statutory minimum periods; they can be increased by the employment contract but not reduced.
Step-by-Step Notice Pay Calculation Formula
Notice pay is calculated on the gross wage including benefits. The calculation is as follows:
Notice Pay = (Number of Days Matching the Notice Period) × (Daily Gross Wage Including Benefits)
1. Find the Daily Gross Wage Including Benefits
The gross wage including benefits covers not just the basic salary but all recurring additional payments:
Travel and meal allowances
Regularly paid bonuses, premiums and heating allowances
Food/shopping vouchers
(Total Monthly Gross Wage Including Benefits / 30 = Daily Gross Wage Including Benefits)
2. Subtract the Deductions (Arrive at the Net Amount)
Unlike severance pay, notice pay is not exempt from income tax. Two main deductions are made from the gross amount:
Income Tax: Deducted according to the employee's income tax bracket (15%, 20%, 27%, etc.).
Stamp Duty: Deducted at a rate of 7.59 per thousand (0.759%).
(No SSI premium deduction applies.)
3. Multiply the Two Values
Multiply the daily gross wage including benefits by the relevant number of days to arrive at the gross notice pay amount.
Example Calculation
For an employee with more than 3 years of service and a monthly gross wage including benefits of 45,000 TL:
Daily gross wage: 45,000 ÷ 30 = 1,500 TL
Notice period: 8 weeks for more than 3 years of service = 56 days
Notice Pay (Gross): 1,500 × 56 = 84,000 TL
💡 Üstad Reminder: This amount is gross. Remember that income tax and stamp duty must be deducted from it before the final payment.
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Key Points to Know About Notice Pay
1. Right to Job-Seeking Leave
The employment contract effectively continues throughout the notice period. An employer who has an employee work out the notice period must give them at least 2 hours of paid job-seeking leave per day. If the employee wishes, they can combine this leave and take it in one block. If the leave is not given or is given only in part, the wages for those hours are paid with a 100% uplift.
2. Does an Employee Who Resigns Pay Notice Pay?
Yes. The notice obligation is two-way. An employee who resigns without giving notice and without just cause (except under Article 24 of the Labour Law) must pay notice pay to the employer.
3. Termination for Just Cause
In cases of immediate termination for just cause under Articles 24 (for the employee) and 25 (for the employer) of the Labour Law, there is no requirement to observe a notice period. In these cases the parties cannot claim notice pay.
4. The Notice Period Cannot Be Split
According to Court of Cassation case law, the notice period is a single whole and cannot be split. For example, giving an employee with a 56-day notice period 30 days' notice and paying compensation for the remaining 26 days is invalid. In this case compensation must be paid for the full 56 days.
5. Limitation Period
The limitation period for notice pay claims is 5 years. It starts to run from the date the employment contract is terminated.
Comparison: Notice Pay vs. Severance Pay
Feature | Notice Pay | Severance Pay |
Minimum Service Requirement | None (even 1 day is enough) | At least 1 year |
Is There a Ceiling? | No | Yes (announced by the Ministry of Treasury and Finance) |
Paying Party | Employer or Employee | Employer Only |
Tax Deduction | Income Tax + Stamp Duty | Stamp Duty Only |
Conclusion: What to Watch When Calculating Notice Pay
Before starting the calculation, establish the employee's length of service correctly; the notice period depends entirely on it.
When calculating the daily wage, include not only the salary but also regularly paid items such as travel, meals and bonuses.
Remember that you cannot arrive at the net payment without deducting income tax and stamp duty from the gross amount.
The conditions for notice pay and severance pay are assessed separately; it is possible to be entitled to both.
❓ Frequently Asked Questions
How many days is the notice period?
It depends on length of service: 14 days for less than 6 months, 28 days for 6 months to 1.5 years, 42 days for 1.5 to 3 years and 56 days for more than 3 years.
Does an employee who resigns pay notice pay?
Yes. The notice obligation is two-way; the employer can claim notice pay from an employee who resigns without giving notice. No notice period is required for termination for just cause.
What is the difference between notice pay and severance pay?
Notice pay has no service requirement and no ceiling; income tax and stamp duty are deducted from the gross amount. Severance pay requires one year of service and has an upper limit (ceiling), and only stamp duty is deducted.
Which wage is used to calculate notice pay?
The gross wage including benefits is used; in other words, recurring payments such as travel, meals and regular bonuses are included on top of the fixed salary.
Can the notice period be split?
No. According to Court of Cassation practice, the notice period is an indivisible whole; if it has been given only in part, the full compensation must be paid.
