TRNC Introduces Mandatory Bank Salary Payments for Businesses with Five or More Employees

TRNC mandatory salary bank payments

The Turkish Republic of Northern Cyprus (TRNC) is set to introduce a significant change to employment practices with new legislation requiring salary payments to be made via bank accounts for enterprises employing five or more staff.

The bill was presented to parliament on 26 January 2026 by Oğuzhan Hasipoğlu, Minister of Labour and Social Security, and is scheduled to come into force on 31 March 2026.

__________________________________________________________

What the New Salary Payment Law Means

Under the proposed regulation, affected businesses will no longer be permitted to pay wages in cash.

Instead, all salaries must be transferred directly into employees’ bank accounts.

Importantly, the legislation does not regulate wage levels. As the minister clarified, the focus is purely on how salaries are paid, not how much employees earn.

The primary objectives of the law are to improve:

• Transparency in wage payments

• Traceability and documentary evidence

• Oversight and regulatory compliance

__________________________________________________________

Why the Five-Employee Threshold Was Chosen

Minister Hasipoğlu explained that the five-employee threshold was selected to maintain social and economic balance.

Small family-run businesses and micro-enterprises are excluded, while the regulation targets businesses of a size where the risk of undeclared work, underpayment, and payroll irregularities is statistically higher.

According to the ministry, bank-based salary payments ensure that employees:

• Receive their full wages on time

• Have documented proof of payment

• Are better protected in disputes over pay or employment conditions

__________________________________________________________

Expected Benefits for Employees and Employers

The new system is expected to eliminate several long-standing issues in the labour market, including:

• “Cash-in-hand” underpayments

• Differences between payslips and actual wages paid

• Undeclared overtime or hidden bonuses

It will also support:

• Accurate calculation of social security contributions

• A tax base based on real, declared wages

• Faster and simpler payroll and compliance audits

For compliant employers, the change is expected to reduce ambiguity and risk during inspections and employment disputes.

__________________________________________________________

Alignment with European Employment Practices

The Ministry of Labour noted that this approach is not unique to Northern Cyprus. Mandatory bank salary payments are already standard practice in many European countries and across multiple regulated sectors.

By adopting similar measures, the TRNC aims to modernise labour administration, strengthen employee protections, and align more closely with international employment standards.

__________________________________________________________

What Businesses Should Do Next

Enterprises employing five or more staff should use the lead-in period before 31 March 2026 to:

• Ensure all employees have valid bank accounts

• Update payroll systems and internal procedures

• Review contracts and payslip documentation

• Consult accountants or payroll providers where necessary

Early preparation will help businesses avoid compliance issues once the law takes effect.