Annual leave is an important component of employment and payroll management in Turkey.
Employers must not only determine how many days of annual leave an employee is entitled to, but also correctly manage leave records, salary payments during annual leave and the payment of unused leave when employment ends.
For foreign companies employing personnel in Turkey, understanding annual leave and payroll in Turkey is particularly important because Turkish Labour Law establishes minimum statutory entitlements that cannot simply be replaced by internal company policies.
This guide explains the main annual leave rules and their payroll implications for employers.
When Does an Employee Become Entitled to Annual Leave in Turkey?
Under Turkish Labour Law No. 4857, employees generally become entitled to statutory paid annual leave after completing one year of service with the employer, including the probationary period.
This means that statutory annual leave entitlement is linked to the employee’s service anniversary.
For example, an employee starting work on:
1 September 2026
would generally complete the first year of service on:
1 September 2027
and become entitled to the applicable statutory annual leave.
Employers may nevertheless provide more favourable leave entitlements under an employment contract, collective agreement or company policy.
How Many Annual Leave Days Are Employees Entitled to?
The statutory minimum annual leave entitlement depends on the employee’s length of service.
1 to 5 Years of Service
Employees with between one and five years of service, including the fifth year, are entitled to at least:
14 days of annual leave
More Than 5 and Less Than 15 Years
Employees are entitled to at least:
20 days of annual leave
15 Years or More
Employees with at least 15 years of service are entitled to at least:
26 days of annual leave
These are statutory minimums.
An employment agreement or collective bargaining agreement may provide longer annual leave periods.
Special Rule for Younger and Older Employees
Turkish Labour Law provides additional protection for certain age groups.
Employees who are:
- 18 years old or younger, or
- 50 years old or older
must receive at least:
20 days of annual leave
even where their normal entitlement based on seniority would otherwise be 14 days.
Is Annual Leave Paid in Turkey?
Yes.
Annual leave is paid leave.
The employee continues to receive remuneration during the annual leave period according to the applicable rules.
The purpose of annual leave is to provide the employee with a genuine paid period of rest rather than simply allowing unpaid absence from work.
The statutory right to annual paid leave cannot be waived by the employee.
How Is Annual Leave Reflected in Payroll?
When an employee takes ordinary annual leave, the employment relationship continues.
The employee remains employed and the annual leave period is treated as paid leave.
Payroll should therefore continue to process the employee’s remuneration and applicable statutory deductions.
Where the employee remains subject to Turkish social security, applicable SGK contributions continue to be relevant during paid annual leave.
Employers should ensure that annual leave is correctly reflected in both:
- HR leave records; and
- monthly payroll records.
Payment Before Annual Leave
Turkish Labour Law contains a specific rule regarding annual leave pay.
The employer is required to pay the remuneration relating to the annual leave period in advance or as an advance payment before the employee begins the leave.
This requirement should be considered when coordinating payroll and employee leave dates.
For foreign employers, this is another reason why HR and payroll teams should communicate annual leave information before payroll is finalised.
Are Bonuses and Overtime Included in Annual Leave Pay?
The calculation of annual leave remuneration does not necessarily include every variable component the employee normally receives.
For the purpose of calculating annual leave pay, certain items such as:
- overtime payments;
- premiums;
- social benefits; and
- other variable payments
are not automatically included in the calculation.
Employers should therefore distinguish between the employee’s ordinary salary and additional variable remuneration when calculating annual leave pay.
Are Weekends Included in Annual Leave?
Weekly rest days are not counted as part of the statutory annual leave entitlement.
Similarly, national and public holidays falling within the annual leave period are not counted as annual leave days.
For example, an employee taking 14 statutory annual leave days may actually be away from work for more than 14 calendar days because weekly rest days and public holidays falling within the period must be considered separately.
This distinction is particularly important for foreign HR teams accustomed to counting annual leave in calendar days.
Can Annual Leave Be Split?
Yes.
Annual leave can be divided into several periods by agreement between the employer and employee.
However, at least one part of the annual leave must be at least 10 days.
This allows employees and employers to organise shorter leave periods during the year while still ensuring that the employee receives a meaningful continuous period of rest.
Employers should maintain records of each leave period taken.
Can Employees Waive Their Annual Leave?
No.
The right to annual paid leave cannot be waived.
An employee cannot simply agree:
“I do not want to take my annual leave.”
and permanently give up the statutory entitlement while continuing to work.
The employer is responsible for ensuring that statutory annual leave is properly managed and provided.
Can Annual Leave Be Replaced With Cash?
During an ongoing employment relationship, annual leave should generally be provided as actual leave rather than simply converted into additional salary.
The purpose of the statutory entitlement is to allow the employee to rest.
The situation changes when the employment relationship ends.
At termination, unused accrued annual leave must be converted into a monetary payment.
What Happens to Unused Annual Leave?
Unused statutory annual leave does not simply disappear because the employee did not take it during the relevant period.
Employers should therefore maintain accurate records of:
Annual Leave Entitlement
minus
Annual Leave Taken
equals
Outstanding Annual Leave Balance
The outstanding balance becomes particularly important when the employee leaves the company.
Unused Annual Leave at Termination
When an employment contract ends, the employer must pay the employee for annual leave that has been earned but not used.
This applies when the employment relationship terminates for any reason, subject to the employee having an outstanding statutory entitlement.
The unused leave payment therefore becomes an important component of the employee’s final payroll.
A typical final payroll may include:
Outstanding Salary
Unused Annual Leave Payment
Applicable Bonus or Commission
Notice Compensation, where applicable
Severance Pay, where applicable
=
Final Gross Employment Payments
Each component must then receive the appropriate payroll treatment.
Which Salary Is Used to Calculate Unused Leave?
Unused annual leave is paid according to the employee’s salary applicable at the date the employment contract terminates.
This point can have a significant financial impact.
Consider an employee who accumulated annual leave when earning:
TRY 70,000 gross per month
but whose salary later increased to:
TRY 100,000 gross per month
If the employment ends while the employee earns TRY 100,000, the unused statutory leave payment is calculated by reference to the salary applicable at termination, rather than simply using the historical salary from when the leave was originally earned.
For employees with large accumulated leave balances, salary increases can therefore significantly increase the employer’s termination liability.
Example of Unused Annual Leave Payment
Consider an employee leaving the company with:
Monthly Gross Salary: TRY 90,000
Unused Annual Leave: 10 days
A simplified daily salary calculation could be:
TRY 90,000 ÷ 30 = TRY 3,000
The gross unused annual leave payment would therefore be:
TRY 3,000 × 10 days = TRY 30,000 gross
This amount must then be processed according to the applicable tax and social security rules.
The employee does not necessarily receive TRY 30,000 net.
Is Unused Annual Leave Subject to Income Tax?
Payment for unused annual leave constitutes employment-related remuneration and must be considered in the employee’s final payroll taxation.
The payment can therefore affect the employee’s taxable employment income and cumulative income tax position.
This is particularly important where the employee has:
- a high salary;
- a significant unused leave balance; or
- other termination payments during the same payroll period.
The final net payment can therefore be considerably lower than the gross unused leave amount.
Is Unused Annual Leave Subject to SGK?
Unused annual leave payments can also have SGK consequences.
Where unused annual leave is paid following termination, the SGK treats the payment according to specific rules relating to the termination month and the applicable social security contribution ceiling.
As a general principle, the unused annual leave payment is associated with the employee’s earnings for the month in which the employment contract terminates, subject to the applicable SGK maximum contribution base.
The payroll provider should therefore review the employee’s contribution base before calculating the final SGK liability.
Resignation and Unused Annual Leave
An employee who resigns does not automatically lose accrued unused annual leave.
The outstanding statutory leave balance must be reviewed when employment ends.
This is important because employers sometimes incorrectly associate unused leave payment only with employer-initiated terminations.
Annual leave payment and severance pay are separate concepts.
An employee may not qualify for severance pay but may still be entitled to payment for accrued unused annual leave.
Dismissal and Unused Annual Leave
The same general principle applies when the employer terminates the employment contract.
Unused annual leave must be reviewed and included in the employee’s final payroll where applicable.
The reason for termination does not simply erase accrued annual leave rights.
Employers should therefore always request the employee’s final leave balance when preparing termination calculations.
Annual Leave vs Severance Pay
Foreign employers should distinguish clearly between:
Annual Leave Payment
and
Severance Pay
They are different legal entitlements.
Unused annual leave concerns days of statutory leave earned but not taken.
Severance pay is a separate termination entitlement that depends on the conditions governing the termination of employment.
An employee can therefore be entitled to unused annual leave payment even when no severance pay is due.
Annual Leave vs Notice Compensation
Annual leave payment should also be distinguished from notice compensation.
Notice compensation relates to the statutory or contractual notice period.
Unused annual leave relates to accrued leave that the employee has not taken.
Depending on the circumstances, a final payroll can contain both amounts.
For example:
Final Salary
Unused Annual Leave
Notice Compensation
Severance Pay
may all need to be considered separately.
Tracking Annual Leave
Employers should maintain accurate annual leave records for every employee.
The records should show:
- employment start date;
- service anniversary;
- annual entitlement;
- additional contractual entitlement;
- leave dates;
- number of days used;
- remaining balance; and
- relevant approvals.
Turkish employers are required to maintain annual leave records.
Accurate records are particularly important when an employee has several years of service.
Why Leave Records Matter for Payroll
Poor leave tracking can create significant financial liabilities.
Imagine an employee who has worked for the company for eight years and whose leave records are incomplete.
When employment ends, a dispute may arise over how many unused days remain.
If the employee’s salary has increased substantially during those eight years, the value of the disputed leave balance can be significant because unused leave is valued according to the salary applicable at termination.
HR and payroll records should therefore be reconciled regularly.
Annual Leave for Foreign Employees
Foreign employees working under Turkish employment law generally benefit from the applicable Turkish annual leave rules in the same way as Turkish employees.
Their nationality does not remove statutory annual leave rights.
International employers should therefore avoid simply applying the employee’s home-country leave policy without checking Turkish minimum requirements.
A global company may offer more generous annual leave, but it should not provide less than the applicable Turkish statutory entitlement.
Can an Employer Provide More Annual Leave?
Yes.
The statutory annual leave periods are minimum entitlements.
An employment agreement, collective bargaining agreement or company policy can provide more favourable terms.
For example, an employer may offer:
25 days annual leave from the first year
even though the statutory minimum would otherwise be lower.
Once additional contractual rights are granted, employers should ensure that their HR and payroll systems correctly distinguish between statutory and additional contractual leave where relevant.
Annual Leave and Company Policies
International companies should ensure that global leave policies are adapted to Turkish employment law.
A global policy might contain rules concerning:
- carry-over limits;
- use-it-or-lose-it provisions;
- holiday years;
- mandatory shutdown periods; or
- payment instead of leave.
Such provisions should not simply be copied into Turkish employment arrangements without legal review.
Turkish statutory annual leave rights must remain protected.
Annual Leave and Employer Cost
Unused annual leave represents a potential future employer liability.
Consider an employee with:
30 unused leave days
and a monthly gross salary of:
TRY 150,000
Using a simplified daily calculation:
TRY 150,000 ÷ 30 = TRY 5,000
The gross value of the leave balance would be:
TRY 5,000 × 30 = TRY 150,000
If the employee’s salary later increases, the potential liability can increase further.
Employers should therefore monitor accumulated leave rather than waiting until termination.
Recommended Annual Leave Process
Foreign employers should establish a structured process:
1. Determine entitlement
Calculate the employee’s statutory and contractual leave entitlement.
2. Track service anniversaries
Annual leave rights are linked to length of service.
3. Record leave taken
Maintain accurate documentation.
4. Review balances regularly
Identify employees accumulating significant unused leave.
5. Coordinate HR and payroll
Ensure leave information is reflected correctly.
6. Review balances before termination
Confirm unused leave before preparing final payroll.
7. Calculate termination payment
Use the applicable salary at the termination date.
8. Apply payroll deductions
Calculate the applicable tax and SGK treatment.
Common Mistakes Foreign Employers Make
Common annual leave and payroll errors include:
- granting less than the Turkish statutory minimum;
- assuming leave begins accruing under a simple monthly pro-rata system from the first month without considering the statutory one-year entitlement framework;
- counting weekly rest days as annual leave;
- counting public holidays as annual leave;
- allowing statutory leave to disappear automatically at year-end;
- replacing statutory leave with cash while employment continues;
- failing to maintain annual leave records;
- using an old salary to calculate unused leave at termination;
- assuming resignation eliminates unused annual leave rights; and
- forgetting to include unused leave in final payroll calculations.
Annual Leave Checklist for Terminations
Before an employee leaves, employers should confirm:
Employment Start Date
Termination Date
Total Annual Leave Entitlement
Annual Leave Already Used
Outstanding Leave Balance
Current Gross Salary
Daily Salary Calculation
Gross Unused Leave Payment
Applicable Income Tax
Applicable SGK Treatment
Final Net Payment
This information should be confirmed before the employee’s exit payroll is finalised.
Understanding annual leave and payroll in Turkey is essential for accurate HR and payroll management.
Employees generally become entitled to statutory annual leave after completing one year of service, with minimum entitlements of 14, 20 or 26 days depending on seniority.
Employees aged 18 or younger and employees aged 50 or older are entitled to at least 20 days.
Annual leave is a statutory paid right and cannot simply be waived or replaced by cash while the employment relationship continues.
When employment ends, however, accrued unused annual leave must be paid based on the employee’s salary applicable at the termination date.
For foreign employers, maintaining accurate leave records is therefore essential not only for employment-law compliance but also for calculating the company’s potential payroll and termination liabilities.
Set Idari Destek supports international companies with payroll and HR administration in Turkey, including annual leave tracking, final payroll calculations, unused leave payments and employee termination calculations.