What Is Notice Pay?
Notice pay is the compensation that must be paid to the other party when an indefinite-term employment contract is terminated without observing the notice period. The Labor Law requires the party wishing to end the employment relationship to notify the other party in advance. If this notice period is not observed, the party at fault pays notice pay.
In short, notice pay is a balancing instrument designed to protect the other party in cases of "sudden dismissal" or "suddenly quitting."
How Long Are the Notice Periods?
According to Article 17 of Labor Law No. 4857, notice periods are determined by the employee's seniority:
- For those who have worked less than 6 months: 2 weeks
- For those who have worked between 6 months – 1.5 years: 4 weeks
- For those who have worked between 1.5 years – 3 years: 6 weeks
- For those who have worked more than 3 years: 8 weeks
These periods are minimums; they can be increased by an employment contract or collective bargaining agreement, but cannot be shortened to the employee's disadvantage.
Who Is Entitled to Notice Pay?
Notice pay is two-way:
- If the employer dismisses the employee without observing the notice period, they pay notice pay to the employee.
- If the employee leaves without observing the notice period, they may pay notice pay to the employer.
An important exception: When the employer terminates immediately for just cause (Labor Law art. 25/II), notice pay does not arise. Likewise, when the employee terminates immediately for just cause, the employee does not pay notice pay.
How Is Notice Pay Calculated?
Notice pay is calculated over the all-inclusive gross wage for the relevant notice period. The all-inclusive wage covers, in addition to the base wage, continuous fringe payments such as transportation, meals and bonuses.
Formula:
Notice Pay = (Notice period in weeks × 7) × Daily all-inclusive gross wage
Example Calculation
Suppose an employee who has worked for 2 years has a monthly all-inclusive gross wage of 45,000 TL. Since their seniority is in the 1.5–3 year range, the notice period is 6 weeks.
- Daily wage: 45,000 / 30 = 1,500 TL
- Notice period in days: 6 × 7 = 42 days
- Notice pay (gross): 42 × 1,500 = 63,000 TL
Only income tax and stamp tax are deducted from this amount; no SGK (social security) premium is deducted from notice pay.
The Difference Between Notice Pay and Severance Pay
| Criterion | Notice Pay | Severance Pay |
|---|---|---|
| Basis | Failure to observe the notice period | Length of service (seniority) |
| From whom to whom | Two-way (employer ↔ employee) | Only from employer to employee |
| Minimum seniority requirement | None | At least 1 year |
| SGK premium | Not deducted | Not deducted |
The two forms of compensation are independent of each other; in a termination, both, only one or neither may apply.
Common Mistakes
- Confusing the notice period with the length of service: The notice period depends on seniority, but it is not severance pay.
- Not taking fringe payments into account: Notice pay is calculated over the all-inclusive, not the base, wage.
- Not giving written notice: Notice being written and provable prevents disputes that may arise later.
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