The ceiling wage in severance pay, which concerns millions of employees, is changing in July. On July 3, after the inflation figures to be announced, civil servant salaries will be determined. With this, the severance pay ceiling will also change. So how much will the new ceiling be in severance pay? Should those who will retire or leave their jobs wait until after July for high compensation? Here are the details…
On July 3, the Turkish Statistical Institute (TurkStat) will announce the inflation figures for the first 6 months of the year. With this, the new salaries of civil servants and retirees will be determined.
On the other hand, the severance pay ceiling is also redetermined according to civil servant salaries. So how much will the new ceiling be in severance pay after July? When a sample calculation is made, how much severance pay will a 10-year employee receive from the ceiling amount? Should those who will retire wait until after July to receive high compensation?
HOW IS THE CEILING AND FLOOR OF SEVERANCE PAY DETERMINED?
Muhammet Bayram, a Certified Public Accountant and Economist, explained to milliyet.com.tr what is curious about the issue:
“The severance pay ceiling and floor is a method applied to protect both the employee and the employer. Here, the severance pay floor is determined over the gross amount of the minimum wage. The ceiling is determined over the increases made to civil servants.
Currently, there is a severance pay ceiling of 35 thousand TL. We expect an increase of around 20 percent in civil servant salaries. Severance pay is not calculated over the 20 percent increase in civil servant salaries. In other words, when calculated over 20 percent of 35 thousand TL, the calculation of 42 thousand TL is not correct.
The circular of the Ministry of Treasury and Finance is published over the salaries to be made to civil servants. With this calculation, the severance pay ceiling is determined.
HOW MUCH WILL THE NEW SEVERANCE PAY CEILING BE?
Currently, the severance pay ceiling is around 35 thousand TL. We expect the new severance pay ceiling to be set around 40 thousand TL in July.
HOW MUCH RAISE WILL BE GIVEN TO CIVIL SERVANTS?
There is currently an inflation difference of 22.72 percent for the first 5 months of 2024. An inflation of 2.50 percent is expected in June. However, the inflation difference for the first 6 months of the year will be around 25 percent.
Civil servants received a 15 percent increase in January due to the collective bargaining raise, they will receive a 10 percent raise in July. An inflation difference will be given on top of this. Our civil servants and civil servant retirees will receive a 20 percent raise difference if there is no change.
It is not correct to calculate the severance pay according to the rate of increase in civil servants’ salaries. There is a situation that varies according to the salary calculation of civil servants. The severance pay ceiling will be around 40 thousand TL.
‘THEY WILL RECEIVE 400 THOUSAND TL COMPENSATION FOR 10 YEARS’
As a sample calculation, if the severance pay ceiling is around 40 thousand TL, when a 10-year employee leaves his/her job, he/she will receive a compensation of around 400 thousand TL when calculated from the ceiling.
SHOULD WE WAIT FOR JULY FOR HIGHER SEVERANCE PAY?
Those who will leave their jobs or retire should wait until July to receive higher compensation. If they retire in June, the severance pay ceiling will be 35 thousand TL, if they retire in July, the calculation will be made around 40 thousand TL as the severance pay ceiling will change.
It should not be forgotten that severance pay is based on the dressed wage. Here, if he/she is paid continuously over the gross wage, if he/she is paid under expenses such as food and travel expenses, these should be added to the wage. Therefore, attention should be paid to the dressed account.”
