No Tags Found!

vanshweta
Hi everyone,
I have a query regarding the advance taken by an employee. He has taken an advance of Rs.1 lacs. for marriage in the family. His salary is Rs. 25000/- per month.
I would like to know, is there a specific % of salary that can be deducted as salary advance?
or is it legally possible that we can recover the whole amount in 4 months? Please provide your inputs.
Thanks & Regards,
Shweta Chirvi

From India, Pune
HR Hiral Mehta
204

Dear Shweta,
Recovering the entire amount would mean not paying him FULL SALARY for 4 months !! ?? How do you expect an employee to run his family (& newly married) without salary for 4 months (irrespective of other sources of income he has or not / or a family member is working or not). At the first instance this thought itself is not practical.
You may take post dated cheques by dividing the amount in 12 installments so as to ensure the employees financial stability & also the company's security. If the employee happens to leave before this period he needs to repay the entire amount.
I've never heard about any specific percentage or amount to be deducted from salary as an installment under any ACT for a corporate loan as it is a part of company policy but wait for others to comment on the same.

From India, Ahmedabad
vanshweta
Dear Mr. Hiral, Thanks a lot for your input. However I have read that a maximum of 50 % of employees' salary can be deducted in one month. R’s Shweta Chirvi
From India, Pune
HR Hiral Mehta
204

Hi,
Just to correct - Ms. Hiral Mehta.
Can you pl mention the details or attach the specific document or act which says so. It would be really helpful. Still I would add that max 50% is fine but entire amount in no case is logical.

From India, Ahmedabad
mahendra_tiwari_9
3

Dear All,
As per my knowledge and our practice we give 75% of 1 month salary, so if salary is Rs.25000/- we will pay him 75% that is Rs.18750 only.
Reason is in case this guy leaves company abruptly with out any information how you will be recovering Rs.100000/- from him ? Hence Company does not give advance on annual salary they give advance on Monthly salary.
Further since you are paying from his monthly gross salary so there is no question of monthly installments and all.
Regards,
Mahendra

From India, Mumbai
vanshweta
Dear Mr. Mahendra,
My query is regarding the maximum amount of money that can be recovered from him monthly.
The practice that your company is following regarding giving advance is totally justifiable but in our case, considering the urgency from the employee, we have given him Rs.1 lacs.

From India, Pune
mahendra_tiwari_9
3

Dear Shweta,
Their is nothing written as such as per my knowledge. The logic say's you should recovery that much amount which will not affect his basic needs hence as suggested by Hiral you can recover equally in 12 installments.
But I suggest you should go ahead and propose standard operating procedure for advance loan, like how to apply, approval, disbursement, recovery, etc because if next time again such situation comes you are clear what to do.

From India, Mumbai
kasibhotlarajhr
Dear Shweta, As per my knowledge, the deduction should not more than 50% on take home (net amount) salary. regards rajesh k
From India, Hyderabad
ChandrasekharReddy
Dear Shweta,
As per my knowledge and in our company we follow this process
1.If we pay salary advance below 50000 , we will recover the same 50% every month so he can accomodate his personal expenses with 50% of salary.
2. if we pay more than 50000 we will recover the same 75% every month till recover of the advance.
because we dont know when employee will quit the job and if any problem is happend there will be no alternative to recover the money.
Regards
Chandrasekhar

From India, Bangalore
batmanabane
1

Dear Shweta,
If your company is registered under Factories Act then the total deduction from the salary should not exceed 25%. When you pay bulk advance (we will call it as LOAN) to an employee you have to look his service period also. We will pay bulk advance to an employee only who are completed 5 years service. The sanctioned loan amount will be equal to75% of his gratuity amount. The maximum instalments to repay the amount is 12 months. (This is the general policy we are following and there is no document evidence for this)
Regards
Batmanabane

From India, Bangalore
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.






Contact Us Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2024 CiteHR ®

All Copyright And Trademarks in Posts Held By Respective Owners.