Payroll or Salary advance policy describes the Company’s terms for advancing pay to your employees as an emergency short-term loan. This policy is designed to support employees to tide-over any urgent financial exigency or emergency for a short period. This policy template is available for download in Word format.
In just a few minutes, you will be able to set up a policy that covers most of the necessary information required. This policy covers rules to be followed with respect to:
Payroll or Salary Advance Policy describes the Company’s terms for advancing pay to your employees as an emergency short-term loan. This policy is designed to support employees to tide over any urgent financial exigency or emergency for a short period.
This policy applies to all our permanent full-time or part-time employees regardless of position. Temporary employees, who have contracts that span more than [one year] as of the date of application for advance, are also covered in this policy. This policy is owned by < Name of the Person >and reachable @ < Contact Number >and
“Payroll advance” refers to employees receiving a portion of their pay before their next normal payday. This doesn’t include any money paid to the employee for relocation or work-related expenses.
< Company Name >is not obliged to pay employees in advance and may choose to accept or reject an application without assigning any reason whatsoever.
Employees can ask for a pay advance if they:
Employees should have a legitimate reason to apply for advance pay, usually an unexpected or unavoidable occurrence. Examples of such reasons are having to pay for:- -- [ Family or personal emergencies ( e.g. being victims of a robbery or fire, having to pay funeral fees ) ][ Hospital bills not covered by medical insurance]
The minimum advance pay is [ half of the employees’ average monthly net pay ] / cannot exceed [ 80% of employees’ monthly net pay. ] If employees find themselves in need of more frequent or larger pay advances than they are allowed, they should discuss the situation with their [ Department and HR Head. ] . Management may decide to make exceptions on a case-by-case basis.
No administrative fees or interest will be charged on such advances.
If an employee resigns or is terminated before repayment of advance, HR is responsible for reaching a new agreement with the employee or deducting the entire remaining amount from the final Salary. Any relevant legal requirements (whether national or local) will be followed.
Employees who want to request a payroll advance should ask HR for an official form.
These procedures must be followed:
Salary advance cannot be paid for the below reasons:
Any Deviation from this policy has to be approved by HR. Any changes to the policy have to be approved by Legal and Compliance.
