Salary Payment in Cash: Is It Legal to Pay Employees Up to Rs. 10,000 This Way?

Dear Seniors,

Please clarify: Can we pay salary to our employees in cash to the extent of Rs. 10,000? Please let me know the existing rule regarding cash payment of salary.

Thanks,
ASAP

As per the latest amendment, we are not supposed to pay any salary or wages in the form of cash. You can pay through online transfer or cheque.

Hello Manoj,

Thank you for your prompt response. Could you please provide the latest amendment or any section/clause that states that we cannot make cash payments to our employees?

Thanks

Clarification on Cash Payment of Salary

Please clarify your statement that a partial salary up to Rs. 10,000/- will be paid in cash. Please inform the rationale for doing so. Note that the Central Government insists on the digitization of all transactions through electronic modes. However, it seems you have not yet digitized the payment of salaries to employees. Salary advances in exceptional cases can be paid in cash. However, ensure to pay the full salary in one stroke through NEFT on or before the 7th of the month if you have fewer than 1,000 employees, and on or before the 10th of the month if you have 1,000 or more employees. For more information, please read The Payment of Wages Act, 1936, together with the latest amendments.

Dear Sir,

We cannot implement any policy that the government is insisting on for online transactions. However, if the Payment of Wages Act, 1936 has been amended to restrict cash payments to employees, could you please provide the relevant section/clause for the same?

Thanks

Dear All,

I am seeking clarity on the specific query regarding paying salary in cash. For instance, if someone's salary is Rs. 10,000 per month, can we pay Rs. 10,000 in cash, or is it mandatory to pay them Rs. 10,000 online as per the latest amendment in the Payment of Wages Act?

Thanks,
Amit

Dear all,

Please clarify, can we pay less than 10,000/- in cash to our worker as a salary? For example, if the laborer is currently drawing 8000/- per month, can we pay this amount in cash as their salary each month?

Dear all,

Please find attached documents that are self-explanatory regarding online payment of salaries.

Dear all,

Can anyone guide me on the "payment of wages in cash mode"? Is it allowed now, or to the contrary, has an amendment been notified for payment in electronic mode?

Regards,
Narendra Ch

The amendment to the Payment of Wages Act states, "All wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee." Does this also mean that the wages can be made in "current coin or currency notes"? Please clarify.