Physical layer network coding (PNC) is a promising technique used to improve the network throughput in a wireless two-way relay (TWR) channel. In this paper, the PNC technique is embraced for a TWR-free space optical (FSO) communication link for the full utilization of network resources. Such a scheme is particularly useful in situations where multiple nodes wish to exchange their information but there is no direct link between them. Compared with a traditional relay-assisted FSO link, the new scheme uses two phases in a round loop for a TWR transmissions link. We present simulation results for the bit error rate (BER) performance of the proposed system considering the effect of both the atmospheric turbulence and the path loss using subcarrier intensity modulation binary phase shift keying (SIM-BPSK). The result shows that for the TWR FSO link based PNC technique under an atmospheric channel with a weak fading strength of 0.3, a BER of 10-4 is achieved at a signal-to-noise ratio (SNR) of ~25dB.