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Salary Advance Policy

This document outlines a salary advance policy for employees of "Your Company Name". It details eligibility requirements, maximum advance amounts, repayment terms over 3-6 months through payroll deductions, and approval processes involving HOD, HR, finance, and management. Exceptions require approval from the HR head or managing director. The policy aims to provide salary advances for medical or personal emergencies while preventing abuse and ensuring repayment.

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Farhan Saghir
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4K views5 pages

Salary Advance Policy

This document outlines a salary advance policy for employees of "Your Company Name". It details eligibility requirements, maximum advance amounts, repayment terms over 3-6 months through payroll deductions, and approval processes involving HOD, HR, finance, and management. Exceptions require approval from the HR head or managing director. The policy aims to provide salary advances for medical or personal emergencies while preventing abuse and ensuring repayment.

Uploaded by

Farhan Saghir
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Salary Advance Policy

“YOUR COMPANY LOGO”

Human Resources | [HRP] Salary Advance Policy


| Last Revision Date
| “Insert Date”
1 PURPOSE

The company doesn’t encourage salary advances or soft loans for its employees.
However, in certain exceptional circumstances, Management & HRD may decide
to provide a salary advance to employees to help them manage their financial
needs for medical or personal emergencies.

2 SCOPE

The policy is applicable to all employees of “Your Company Name” across all


locations including the group companies.

3 POLICY

 3.1 Eligibility
o 3.1.1 An employee should have a minimum of “Enter Number of
Years” tenure in the organization and should be a confirmed
employee.
o 3.1.2 The employee should not be on active PIP (Performance
Improvement Plan) or disciplinary warning at the time of application.

 3.2 Advance Amount


o 3.2.1 Depending on the financial need the salary advance may vary
between one (1) month gross salary to three (3) months gross
salary (maximum).

 3.3 Repayment
o 3.3.1 No interest shall be charged on the Advance Amount.
o 3.3.2 Repayment of the Advance Amount needs to be done within 3
or 6 monthly installments (preferably).
o 3.3.3 The installment amount shall be deducted from the monthly
salary of the employee.
o 3.3.4 The first monthly installment shall start from the next month in
which advance salary was credited to employee’s salary bank
account.

 3.4 Approval Matrix


o 3.4.1 The salary advance request needs to be first approved by the
HOD, Finance, HR Head and finally by the Management team before
being processed.
 3.5 Guidelines
o 3.5.1 Employee should be a confirmed employee with over “Enter
Number of Years” of tenure in the organization.
o 3.5.2 The employee should not be on active PIP, Corrective or
Disciplinary action plan at the time of applying.
o 3.5.3 The employee shall only be eligible to receive advance in case
of medical emergency and personal exigency.
o 3.5.4 An employee is eligible for salary advance only once in a block
of 12 (twelve) months, provided there are no pending advances or
other dues recoverable from an employee on the date of their
request.
o 3.5.5 An employee is eligible for advance only thrice, during his
tenure with “Your Company Name”. However, the employee will be
eligible for advance second time, only if the first advance amount has
been paid and closed.
o 3.5.6 The employee availing salary advance from office is required to
sign the salary advance agreement and deposit an undated security
cheque equivalent to the sanctioned loan amount in favor of “Your
Company Name”.
o 3.5.7 After successful repayment of the salary advance the employee
can collect back the security cheque deposited with the Finance
department.
o 3.5.8 In case an employee separates from the company due to any
reason whatsoever, prior to repayment of the entire advance amount,
he/she shall be required to clear the entire pending amount upfront
and settle the dues before the last working day, failing which entire
pending amount shall be recovered from the full & final settlement of
the employee.

 3.6 Application Process


o 3.6.1 A written email request should be sent by the employee to
his/her respective HOD stating the reason for the salary advance.
o 3.6.2 The respective HOD needs to apply jurisprudence while
approving such salary advance request. Employee’s performance,
behavior, commitment and most importantly reason for taking Salary
Advance are some of the factors that should be considered.
o 3.6.3 The consented salary advance request then needs to be
forwarded to the Talent Management (via HOD).
o 3.6.4 Manager Talent Management shall cross check eligibility,
reason for advance and also check with the Finance Department for
any outstanding advance dues with the employee.
o 3.6.5 The Talent Management Manager then shall seek the
appropriate approvals from the HR Head and the Management team.
o 3.6.6 Post the approval from Management team, the Talent
Management team will get the Salary Advance Agreement signed by
the respective employee and collect the security cheque.
o 3.6.7 After advance request is sanctioned from the appropriate
authority, it will be processed within a maximum of “Enter working
days” of receiving the request by the Finance team.
o 3.6.8 The salary advance amount can either be credited to the
employee’s salary saving account or shall be given in form of account
payee cheque only.
o 3.6.9 In case the advance request is disapproved, the Talent
Management Manager shall inform the employee stating the reason
for decline (if informed by the Management).
o 3.6.10 “Your Company Name” Management team reserves the right
to disapprove any Advance request and is not liable to provide
reasons for decline as deemed appropriate.

 3.7 Reporting and Controls


o 3.7.1 The HOD shall be responsible for the first level approval and
must exercise jurisprudence when approving such request.
o 3.7.2 The Talent Management team and Payroll/Finance team shall
ensure compliance and adherence to the approval matrix.

 3.8 Governance
o 3.8.1 The Policy shall be governed by the HR department along with
the assistance of the Finance/Payroll Team.

 3.9 Exceptions
o 3.9.1 No exceptions shall be made in the policy unless the policy is
countermanded by the HR Head.
o 3.9.2 Any exceptions in this policy can be only approved by the
Managing Director.
4 ROLES & RESPONSIBILITIES

5 GLOSSARY

NA

6 RELATED POLICIES, PROCEDURES, OR OTHER REFERENCES

7 APPENDIX A

“Attach related policies & procedures”

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