January raise will increase severance pay: Here are the new calculations

Calculations for severance and notice pay, which are the most important safeguards for employees, are changing as of January.

Both new salaries and the civil servant raise will be effective in the increase of the compensation, which offers private sector employees the opportunity to receive a lump sum upon leaving their jobs. Here are the details...

Those who leave their jobs for reasons other than their own request or fault, as well as those who leave due to retirement, military service, marriage for women, or justified termination, can receive severance pay if they have worked at the workplace for at least 1 year.

This compensation is paid based on the employee's last gross salary including benefits. Regular payments received during the year are also added to the gross salary. The length of service is multiplied by the gross salary including benefits to determine the severance pay amount. Only stamp duty is deducted from the severance pay to be paid.

HOW MUCH WILL IT INCREASE?

The minimum wage will increase as of January 1. While minimum wage earners who currently leave their jobs are paid compensation based on 20 thousand 2 liras (19 thousand 850 liras after stamp duty deduction) for each year they worked, this amount will increase in January.

For example; if the gross minimum wage is increased by 35 percent, the lowest annual severance pay will rise to 27 thousand 3 liras.

The payment to be made after deducting stamp duty will be 26 thousand 798 liras. If the minimum wage is increased by 44 percent, which is the Central Bank's 2024 inflation forecast, the lowest compensation will rise to 28 thousand 803 liras (28 thousand 584 liras after stamp duty deduction).

According to the news in Takvim, employers will also increase the salaries of their other employees along with the minimum wage raise. For this reason, the compensation of other employees will also increase at the same rate as their salary increases.

WHAT WILL THE CIVIL SERVANT RAISE BRING?

There will also be an increase in the severance pay ceiling. The increase in the civil servant salary coefficient will raise the severance pay ceiling in January. The ceiling, which is currently 41 thousand 828 liras, will reach 46 thousand 847 liras if the civil servant raise is 12 percent, and 47 thousand 266 liras if it is 13 percent.

Since stamp duty is deducted from the compensation, the employee leaving the job will receive at most 46 thousand 492-46 thousand 907 liras for each year worked according to these rates.

HOW WILL NOTICE PAY CHANGE?

According to the Labor Law; notice pay is paid to an employee who is dismissed without complying with the notice period based on 2 weeks if the length of service is less than 6 months; 4 weeks if it is between 6 months and 1.5 years; 6 weeks if it is between 1.5 and 3 years; and 8 weeks if it is more than 3 years.

The wages for those periods are calculated based on the gross salary, and income tax and stamp duty deductions are made.

Salaries that will increase in January will also raise notice pay.

For example; the 2-week notice pay of minimum wage earners will rise from 7 thousand 863 liras to 10 thousand 615 liras if the January raise is 35 percent, and to 11 thousand 323 liras if it is 44 percent.