Salary Advance And Loan Advance Policy

In order to assist staff members to meet emergency financial needs and also prevent distraction from work, every company needs to put in place a policy for Salary Advance And Loan Advance. This policy also helps to control staff members’ indebtedness to the company. Here we will give you a sample of what this policy looks like. You can copy and use for your company. Salary Advance Loan Advance Policy.

Salary Advance Loan Advance Policy.

SALARY ADVANCE

A. Policy Objectives

• To assist staff members in meeting emergency financial needs and thus prevent distraction from work.
• To encourage savings by staff members and thus prevent avoidable or unnecessary financial pressure.
• To prevent abuse and safeguard staff members from being in perpetual indebtedness to the company.
• To prevent pressure or disruption on the company cash flow management.

B. Policy Guidelines

1. All salary advance requests shall be made in writing, signed by the applicant and the applicant’s head of department or supervisor and addressed to the Human Resources Manager.
2. The Human Resources Manager shall consider each application on its merit and if satisfied shall recommend for approval to the Finance Manager.
3. Application for salary advance shall be considered once in a month subject to maximum approved limit of 50% of the applicant’s net monthly salary.
4. Notwithstanding the provision in (iii) above, prospective applicants who have exhausted the maximum limit permissible in a month but possess strong and convincing case could apply in writing, signed by the applicant and the applicant’s head of department or supervisor, addressed to the Human Resource Manager for concession and if satisfied, shall recommend for override by the MD.
5. All salary advance granted in a month shall be 100% deductible from the next immediate month salary.
6. To avoid disruption of the company’s cash flow management, only salary advance request made in writing between 10th and 25th day of a given month shall be considered for approval.
7. Salary Advance shall attract zero percent interest charge.

C. Policy Commencement Date

This policy takes effect from 1st May, 2017. (You can put your own date)

 

LOAN ADVANCE

A. Policy Objectives

• To assist staff members in meeting emergency financial needs and thus prevent distraction from work.
• To encourage savings by staff members and thus prevent avoidable or unnecessary financial pressure.
• To prevent abuse and safeguard staff members from being in perpetual indebtedness to the company.
• To prevent pressure or disruption on the company cash flow management.

B. Policy Guidelines

1. Any applicant disqualified to access salary advance could apply for loan advance.
2. All loan advance requests shall be made in writing, signed by the applicant and the applicant’s head of department or supervisor and addressed to the Human Resources Manager.
3. The Human Resources Manager shall consider each application on its merit and if satisfied shall recommend for approval to the Finance Manager.
4. Application for loan advance shall be considered once in six months subject to maximum monthly repayment of 40% of the applicant’s net monthly salary.
5. Notwithstanding the provision in (iv) above, prospective applicants who have exhausted the maximum limit permissible within six months but possess strong and convincing case could apply in writing, signed by the applicant and the applicant’s head of department or supervisor, addressed to the Human Resource Manager for concession and if satisfied, shall recommend for override by the MD.
6. All loan advances granted shall be due for deduction from the next immediate month salary.
7. Loan advance request can be made and shall be considered any time of the month subject to cash flow availability.
8. Loan Advance shall attract zero percent interest charge.

C. Policy Commencement Date

This policy takes effect from 1st May, 2017. (You can put your own date)

 

This policy may differ from company to company depending on their organizational structure and goals. The above Salary Advance Loan Advance Policy can be adjusted to suit your organizational needs. You can as well copy this Salary Advance Loan Advance Policy and edit it for use in your company.

 

Was this helpful? Please share.