Employers who cover accommodation and food expenses will be able to deduct 40 percent from salaries: TRNC government introduces key reforms on wage

Lefkosia, TRNC – The Prime Ministry of the Turkish Republic of Northern Cyprus (TRNC) has announced significant policy changes aimed at addressing wage disparities between foreign and local workers and reducing the financial burden on pensioners in accessing healthcare.

As part of a new legislative decree, employers in the TRNC who provide accommodation and meals to foreign workers will now be permitted to deduct up to 40% from the employees’ salaries. This move aims to narrow the wage gap between foreign workers receiving such in-kind benefits and local workers who do not.

Addressing Long-standing Wage Inequality

According to the Prime Ministry, the regulation is intended to promote fairness in the labor market by tackling inequalities that arise when foreign workers receive additional support such as lodging and meals, while local employees are often left to cover these costs themselves.

The Minimum Wage Law, in effect since 1975, has traditionally applied equally to all employees regardless of nationality. However, in practice, discrepancies have emerged due to employer-provided benefits for foreign laborers. The new regulation specifically applies to workers brought in from countries with which the TRNC does not have a bilateral labor agreement, allowing employers to make up to a 40% deduction from the minimum wage in return for accommodation and food.

“The regulation aims to ensure wage justice in the labor market,” the Prime Ministry stated.

Healthcare Contributions for Pensioners Abolished

In a parallel reform, the government has also abolished the 20% co-payment requirement for certain groups of citizens when obtaining medications from state-run pharmacies. This includes social insurance pensioners, individuals receiving permanent disability, disability pensions, and survivors’ benefits such as widowhood or orphanhood pensions.

The co-payment policy had been in place since 1991, requiring eligible citizens to contribute 20% towards their prescription medication costs. Under the new decree, these individuals and their dependents will no longer be subject to this contribution when accessing drugs through public pharmacies.

The Prime Ministry emphasized that the reform aims to ease financial barriers to healthcare, stating, “The goal is to reduce the economic burden in accessing medical services.”

With these two measures now in force, the TRNC government is taking steps to create a more equitable labor market and to enhance access to healthcare for vulnerable segments of the population.