Northern Cyprus now allows employers to reduce foreign workers’ salaries by up to 40% if housing and meals are provided. Learn about the new policy, who it affects, and additional social reforms announced by the TRNC government.
New Labor Policy in North Cyprus: Up to 40% Salary Reduction for Foreign Employees with Benefits
In a significant shift to the employment landscape, the government of Northern Cyprus has introduced a new policy allowing employers to reduce the salaries of foreign workers by up to 40%, provided that the company covers their housing and food expenses.
The change was officially presented by Sadyk Gardianoula, Minister of Labor and Social Protection, who emphasized the need to address perceived pay imbalances between local and foreign employees in the TRNC labor market.
Why the Policy Was Introduced
According to Gardianoula, the current system has unintentionally favored foreign workers—especially in low-wage sectors—because many employers already offer free accommodation and meals in addition to paying the full minimum wage. This, in effect, resulted in foreign workers having higher net compensation than local employees who must cover living expenses on their own.
With the new regulation, if an employer formally documents the provision of both housing and food, they may legally deduct up to 40% from the foreign worker’s gross salary.
Important: This deduction is only permitted if the benefits are explicitly stated in the employment contract and verified through official documentation.
Introduction of the ‘National Minimum Wage’ for Citizens
As part of the same reform, the TRNC government is also introducing a “national minimum wage” that will apply only to citizens of Northern Cyprus. This ensures that local workers will not be affected by the new industry-specific salary changes impacting foreign employees.
Social Reform Measures Also Announced
Alongside the labor policy update, the government unveiled new social protection initiatives, including:
- Free access to medicines in state pharmacies for:
- Pensioners
- People with disabilities
- Orphans
- Other socially vulnerable groups
These changes are part of a broader social reform package aimed at improving living standards and reducing economic inequality across the country.
What This Means for Employers and Foreign Workers
Employers must now:
- Clearly define housing and food arrangements in contracts
- Comply with official reporting requirements
- Ensure that salary deductions do not exceed the allowed threshold
Foreign workers and expats should:
- Review new contracts carefully
- Verify that benefits such as housing and meals are formally provided
- Seek legal or professional advice if unsure about their rights under the new rule, northcyprusinvesting.com, Investra.io