Can We Pay Salaries in Cash? Understanding Limits and Legalities for Daily Advances

Dear Sir/Madam, can we make a salary payment in cash ₹15,000/-? If not, how much can we make? Employees/labourers are receiving cash advances daily on a weekly basis.

For example, an employee/labourer drawing a salary of ₹15,000/- takes a cash advance of ₹6,000/-, and then the remaining amount is paid into a bank account at the end of the month. Is this acceptable?

Payment Methods: Bank vs. Cash

It is always better to make all payments through the bank instead of using cash, including advances, loans, etc.

Regards, S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions [Phone Number Removed For Privacy-Reasons]

It would be better to credit the advance amount to the bank account. Please mention the advance amount in the payslip and obtain their signature.

Thanks.

Salary Payment and Advance Management

Suppose an employee has worked for a week; it would be safe to disburse the six days' payment as they have already worked for it. In case the employee absconds, you are safe as you do not lose anything. Paying them a sum of Rs. 6000/-, almost equal to half the month's salary, puts you at risk. Please ensure precaution and take a written undertaking of this. Also, ensure that this amount has been paid in advance while disbursing the salary at the end of the month. Mention the same on the payslip without fail and keep track of the amount disbursed as an advance in the Salary Advance Register as per the payment made in advance for records.