ERBIL, Iraq, Feb 4 (Reuters) - Government workers in Iraq's Kurdistan are to have their salaries cut by up to 75 percent as the region grapples with an economic crisis brought to a head by plummeting oil prices

Under the new measures, state employees will receive only a portion of their salaries, cutting the monthly burden of 875 billion Iraqi dinars ($800 million) on the Kurdistan Regional Government (KRG).

The unpaid portion will be treated as a loan to be repaid by the government when its fiscal health improves, in addition to the past five months of salaries that have not been distributed, the KRG said in a statement.

KRG employees at the top end of the payroll will have their wages cut by as much as much as 75 percent, whereas those with a base salary of between 100,000-200,000 Iraqi dinars will be shaved by 15 percent.

The new measures do not include Interior Ministry employees or Kurdish peshmerga fighters on the frontline with Islamic State. Kurdish forces have driven Islamic State militants back in the north with the help of U.S. air strikes.

After a decade-long economic boom, the KRG began to suffer in 2014 when the Baghdad government slashed its share of the budget in response to the Kurds' moves to export oil independently through their own pipeline to Turkey.

The war against Islamic State and an influx of more than 1 million people displaced by violence in the rest of the country, on top of the global slump in oil prices has compounded the problem, which is also the result of years of mismanagement and corruption.

On Wednesday, the KRG said a board would be created to oversee all oil and gas revenues with an international auditor, in an apparent bid to restore public confidence.

(Reporting by Isabel Coles; Editing by Alison Williams) ((isabel.coles@thomsonreuters.com; +964 790 191 7024; Reuters Messaging: isabel.coles.reuters.com@reuters.net))

Keywords: IRAQ KURDS/