SALARY ADVANCES
Salary Advances
Salary advances stand for short-term loans given to employees by their employers with the knowledge that the amount will be deducted from the employees future pay. Employees can access a portion of their future earnings before their regular payday, giving temporary help in the event of unexpected bills or financial difficulties.
Key Features of Salary Advances
- They are intended to be short-term solutions, usually repaid within a few months or by the end of the fiscal year.
- The advance amount is deducted from the employee's net income over subsequent pay periods.
- In many cases, salary advances are interest-free.
- Employees typically need to apply for a salary advance, specifying the amount requested and providing reasons for the request.
- Repayment terms are agreed upon between the employer and the employee.