Salary Advance Policy: How Should I Frame It for My Team?

Hi all,

I 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 extraordinary circumstances only.

Regards, Madhu.T.K

Hi Kiran,

In our company, we don't have a salary advance scheme, but we have the policy of an emergency loan. In this scheme, we basically provide one month's salary if the employee has been working for 6 months. However, if the employee has been with our company for more than 1 year, we offer 3 months' salary or more (as per management decision) based on the employee's requirement.

This loan is completely interest-free.

I hope this information is helpful.

Thanks, Nipuna

Hi Kiran,

We have an advance policy and form for applying for an advance. This is totally interest-free. I am attaching it; you can modify it according to your organization.

Regards,
Dabas

Hi,

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

Salary Advance Policy

1.0 GENERAL

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,

Thank you for posting such an apt salary advance policy. It is definitely going to help me to frame a salary advance policy for my company.

Thanks a ton!

Regards,
Bharti

Dear Dabas,

Thank you for posting such an apt salary advance policy. It is definitely going to help me to frame a salary advance policy for my company.

Thanks a ton!

Regards,
Bharti

Can an employee ask for part of their salary in advance? I want to inquire about whether the employee has a legal right to request a portion of their salary in advance. Additionally, the employee is new, and it is their first month on the job.

Thank you.