You’ve heard of cash advance, but have you heard of salary advance? It’s not a phrase that is commonly thrown around in the professional world, and in most companies, it’s not something that is offered freely.
But sometimes, desperate times call for desperate measures. Here are some of the things that you should know about salary advance, before you even think about requesting for one:
What Is A Salary Advance?
As the phrase suggests, a salary advance means getting your salary (or pay) ahead of time. For example, say your salary is paid on a monthly basis on the 25th of every month. Then, let’s say that some unexpected financial emergency befalls you on the 10th, and you request for a salary advance from your employer.
Upon approval, your next salary that is supposed to be paid on the 25th will be disbursed on the 10th instead.
No Kidding! How Does It Work?
The most important thing that you’ll need to remember is that a salary advance works just as any other loans; which means that there are conditions attached to it. First, we address the amount to which you can request for an advance. According to the Employment Act of 1955, ‘An employee may only request an advance in the amount that does not exceed the employee’s salary in the preceding month’.
In a not-so-legal term, it means that you’re only allowed to request for a salary advance that is not more that your last withdrawn salary. But when you’re in a financial pickle and have nowhere else to turn to, a month’s salary is still a great help, no?
Note that while some of the smaller companies may agree on your request with just a handshake and an understanding nod, most companies will ask you to sign a little agreement document acknowledging the salary advance which spells out its amount, the repayment schedule, and the permission to allow the company to deduct your future salaries for the repayment.
Speaking of the repayment period, there’s no exact regulation that governs it. It’s up to your employer’s discretion and how you word your request; whether you want the company to deduct the lump sum amount from your next salary, or deduct a predetermined amount over a time span.
Will It Be Reflected In My Employment Record?
Why yes, of course. Your salary advance request, along with other official requests such as annual leaves and medical leaves will go into your employment record, and there it will stay until perhaps the end of time (or until it’s somehow destroyed, or deleted, or written off, you get the picture).
Bear in mind that while salary advance is legally allowed as per the Employment Act of 1995, it’s not something that is prevalent in the professional world. The phrase itself is somewhat of a taboo, as it reflects on your money management skills.
Perhaps it won’t matter as much if you work in a small company where your boss is the ultimate authority. But for those of you who work in large corporations with a dedicated Human Resource (HR) department, you will, without a doubt, have to go through several stages to get the approval for your request, and seriously, do you really want your financial problem bandied about - across departments - for the sake of some cash?
Will My Company Charge An Interest On My Salary Advance?
That’s a hard no, people. Our employment regulations help protect your rights to your own salary (whether it’s an advance or not) by expressly forbidding companies from charging an interest to a salary advance.
How Do I Request A Salary Advance?
Hold your horses, before you give yourself any hope of remedying your financial emergency with a salary advance, first check with your company whether it’s allowed, or whether they have a policy against it. Some companies post their salary advance guidelines online or on the employee handbook. If your sleuthing resulted in zero intel, head to your HR and have a discreet conversation with them about it before putting yourself on the spot.
Once you’ve gathered the intel, pick a time when you’re sure your boss or HR manager isn’t in a rush or busy, and politely ask to speak to them in private. Then, take a deep breath, cross your fingers, and state your intention to them in a concise, businesslike manner.
Avoid emotional and long narrations. Your boss or HR manager will ask the reason why you’re asking for an advance to deem whether or not your request is worthy of an approval, but they don’t need to know the A-Z details on how someone crashed into your precious car, or how you thought your heart would jump out of your chest when you were robbed at knife-point. Just say that you’re going through a financial emergency and that you need the money urgently, with the emphasis on it being a one-time only request. Besides, you wouldn’t want your boss of all people to be privy to your personal problems, do you?
What If I Leave My Job Mid-Repayment?
The agreement between you and your employer should cover the what-to-dos in the event you willingly leave or are fired from the company. What usually takes place is the company will simply deduct your final salary and/or your severance package.
If the former presents a huge financial challenge for you, talk to your employer and see if the repayment schedule can still continue, but through a direct debit. Besides, if you already have the repayment schedule agreement in place, it may be illegal to simply deduct the remainder of your salary advance in one go.
If you’re facing any problems with your salary advance repayment agreement after you leave your employment, contact the Labour Law office to get some clarification or support on the matter.
So Should I Consider A Salary Advance As An Option?
If your financial situation at the time is dire enough to disrupt your work performance, and if it’ll help lift you out of your financial emergency, then it’s fine to seek financial assistance from your employer. Just remember that it should only be a single occurrence, and not a habit. Besides, your employer is not obliged to assist you financially, and may turn your request down without a backwards glance.
If you do get a salary advance and your request is approved, it’s imperative that you should stick to the repayment plan, and never ever ask for a second advance while you’re still paying off the first one if you want to remain in your employer’s good graces and maintain your reputation at work.
Lastly, a salary advance is a private affair between you and your employer, so keep the matter on the down low. For your career’s sake, don’t share it with anyone - especially with your colleagues - whether your request is approved or not. Also, it’s wise to abstain posting about work-related related updates on your social media account. You never know who might be reading them.
If you have some time to resolve your financial difficulty, and you don’t want to dip into your future salary, maybe try applying for a personal loan as an alternative. There are plenty of personal loans that offer fast approval and low interest rate (provided you have a good credit record) to assist you in your times of monetary needs. Have a look at our comparison page for a list of available personal loans in the market!