Industrial Relations And Labour Laws
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Mrs Kiran
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HI All. Need some suggestions for framing the Salary Advances to be made. regards Kiran
Though there is no specific ruling in this regard, you can have your own procedure. It is always good if you do not go for a written ruling on this. However, you can pay salary advance as a matter of your discretion. The employee shall also be given an impression that salary advance is not his right. To follow a principle, advance shall be paid in extra ordinary circumstance only.

hi Kiran
in our company we dont have the salary advance scheme but we have the policy of emergency loan. in this scheme we basically provide one month salary, if the employee is working from 6 months. but if the employee is working in our company from more than 1 year then we give 3 month salary or more (as per the management decision) and as per the requirement of the employee.
this loan is totally interest free.
hope this will help you out

Kiran, we have advance policy and form to apply for advance. This is totally interest free. I am attaching it you can modify according to your organization. regards Dabas

Attached Files
File Type: doc staff_advances_policy_142.doc (34.0 KB, 5869 views)


This is the policy that i use in my company. probably this may be of some use to you.

Salary Advance Policy


1.1 Objective :

To enable employees, draw part of their salary before the pay-day during contingencies.

1.2 Applicability :

All confirmed employees of XXX Technologies Private Ltd.

2.0 Entitlement and Procedure :
  1. This facility is being provided to employees who avail authorized leave for a period of six days or more with the pay-day falling in between.
  2. It will also be allowed in exceptional cases where the employee faces a personal emergency / contingency situation. This advance cannot be paid in cases where the need is known or predictable.
  3. The advance payment will not, in any case, exceed 75% of the net salary paid as per the previous month’s payroll.
  4. Salary advance will be given only twice in a calendar year with a minimum interval of 2 months between two such payments.
  5. Recovery of the entire advance will be made from the salary payable for the same month.
  6. Since salary has to be paid only on the pay-day and this facility of advance payment has been expended only to meet unforeseen circumstances, the department heads will be recommended this only very selectively, on merit basis subject to norms detailed above.
  7. The application should be submitted to the HR department through the concerned department head. The same would be forwarded to accounts department for payment after duly certified by HR department.

Dear Dabas, Thanks for posting such an apt salary advance policy. I is definitely going to help me to frame a salary advance policy for my company. Thanks a tonnn Regards Bharti
Dear Dabas, Thanks for posting such an apt salary advance policy. I is definitely going to help me to frame a salary advance policy for my company. Thanks a tonnn Regards Bharti
Can a employee ask for part of salary in advance.
I want to ask whether the employee has a legal right to ask for a part of salary in advance?
Also, the employee is new and its his first month on the job.

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