Can someone help me with SOP for Advance/Loan in an organization
From India, Pune
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3From India, Pune
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Hi, First, you need to establish the eligibility criteria for an employee loan, such as who can apply for the loan, whether it is limited to confirmed employees only, etc.
Formulate a policy and consider including the following points:
- What will be the maximum loan amount per employee, for example, 2 months of net or gross salary as an advance.
- An employee cannot apply for a new loan until they have settled their existing loan.
- Determine the maximum EMI period, considering a maximum of 12 to 15 months.
- Loan requests will be considered for specific reasons such as medical emergencies, school fees for children, or the death of an immediate family member. Additional reasons may be added if necessary.
- Differentiate between a salary advance and a loan. A salary advance involves a partial payment to the employee upon request, with the remaining balance paid during the regular salary disbursement. There is no EMI option for salary advances.
- Note that if an employer provides a loan to an employee, it is considered a perquisite and is taxable based on specific criteria.
From India, Madras
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Formulate a policy and consider including the following points:
- What will be the maximum loan amount per employee, for example, 2 months of net or gross salary as an advance.
- An employee cannot apply for a new loan until they have settled their existing loan.
- Determine the maximum EMI period, considering a maximum of 12 to 15 months.
- Loan requests will be considered for specific reasons such as medical emergencies, school fees for children, or the death of an immediate family member. Additional reasons may be added if necessary.
- Differentiate between a salary advance and a loan. A salary advance involves a partial payment to the employee upon request, with the remaining balance paid during the regular salary disbursement. There is no EMI option for salary advances.
- Note that if an employer provides a loan to an employee, it is considered a perquisite and is taxable based on specific criteria.
From India, Madras
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Employee reference policy.doc