How to Handle Undocumented Cash Allowances When Negotiating a New Salary Offer?

I am receiving my salary in two components: one reflecting in my paycheck and the other in the form of cash. The issue is that this second component, received in cash, is not mentioned anywhere in my offer letter. This amount is designated as welfare and education allowance, although it is not specified in any documentation. When I requested proof from the company, it was denied. How should I address this when negotiating my salary with a new company?

Regards,
Raja

You can always mention to your future company that you used to receive X lacs plus a 25,000 Rs cash allowance, which is not documented anywhere. You need to develop the skill to convince the HR of the future company during discussions about the pay structure. Many times, the company agrees when this is presented in a smart way.

Thank you for your valuable suggestion. However, the concern is, what will happen if verification occurs and the company denies this information?

Kind regards,
Regards

Can anyone please let me know a few pieces of information on this? My current company pays me a certain amount in cash as a second component but does not provide anything in writing. I have informed my future company about this during the interview. I also have doubts about whether my current company will provide this information at the time of verification. Please suggest how I can justify this fact. Does it make a big difference if I am unable to prove it? What could be the repercussions, as I am not misleading my future company?

Request for a prompt response.

While you can't produce any proof for the payments of the cash component of the salary, you surely would have this aspect mentioned clearly in the Salary Breakup in the Offer/Appointment Letter when you joined. You can use it to prove that you did indeed receive cash payments.

Regards,
TS

Dear Sateesh, it is not mentioned in my salary slip. Also, I started receiving this amount after working two years in the company, but nothing is clearly stated in black and white. My concern is what will happen if the current company denies this amount to the verification firm?

That's a chance one would always need to take with cash payments. When you mention your salary details during interviews, suggest mentioning clearly that the particular amounts are paid in cash. Also, mentally prepare the HR of the new company to hear any denial during background checks—some companies accept that the amounts were paid in cash while some don't. Being cash payments, their HR/Accounts personnel would hesitate to say anything like that on record. I have seen cases where amounts as much as 40% of the total CTC were in cash—even at senior levels. From your end, you surely need to be mentally prepared to take a hit [new salary based on PROVABLE existing CTC], meaning being prepared for the worst-case scenario even while trying to work towards the best-case scenario. All the best.

Regards,
TS

When negotiating your salary with a new company and addressing the unverifiable cash salary component issue, it is crucial to approach the situation strategically and proactively. Here are some practical steps you can take: - Clearly communicate during interviews that certain components of your current salary are paid in cash, ensuring transparency from the beginning. - Be mentally prepared for potential denial from the new company's HR during background checks, as cash payments might not be officially documented. - Understand that transitioning to a new salary structure may require adjustments, possibly based on the provable existing CTC. - Emphasize the importance of clarity and transparency regarding all salary components in the new offer letter and employment contract. - If legal implications arise, seek guidance from relevant labor laws or policies to protect your rights and ensure fair treatment. Overall, maintaining open communication, managing expectations, and advocating for transparency are key elements in navigating the unverifiable cash salary component during negotiations with a new employer.