Have you ever heard of advance payment? Probably yes, but do you know how the salary advance works ?
The salary advance is nothing more than an early release, which the company makes part of the employee’s salary .
The main function of what is a salary advance is to help in the biggest financial problems of its employees and positively impact on the quality of life of employees.
This solution reduces the stress of employees in relation to the lack of money throughout the month and consequently influencing their well-being and productivity .
But how does wage advance work in practice? That’s what we’re going to talk about in today’s article. Good reading!
How does the salary advance work?
The salary advance is a non-mandatory corporate benefit under the law, strategically granted by certain companies.
It is the advance payment of a portion of the employees’ wages before the usual date.
There are no laws that establish rules on how the wage advance should work.
Even so, the topic is a matter of doubt within many organizations that do not know how to proceed with the matter.
For this reason, the salary advance respects union conventions and class agreements.
Who is entitled to a salary advance?
Since we know how the salary advance works, a recurring question is about who is entitled to it .
In fact, there are no legal rules for this type of concession, it is recommended that the company create an internal benefits policy regarding it.
However, it is not correct to make it available only to a small number of people. All employees have the right to receive it, except for any restrictions made in negotiations with the union.
Therefore, it is important to define rules to be followed and valid for teams in general , regardless of positions and functions.
How are salary advance discounts made?
It is common for the salary advance to vary from 20 to 40% of the employee’s salary and be made between the 15th and 20th of each month.
This variation exists because, as we said earlier, there is no specific law on how the wage advance works.
Therefore, flexibility at work should involve negotiations on the percentage, which must be defined by common agreement between employee, employer and union.
We emphasize that the employee has the right to suspend the advance if he prefers to receive the full salary at the end of the month.
The different ways to carry out the wage advance
Now that you know what a payday loan is and how it works, it is common for questions to arise about how it can be made available.
Therefore, we have prepared a list of the different ways to offer the salary advance. Check out!
Undoubtedly, the so-called “voucher” is one of the most used methods in relation to salary advances.
Through it, the company sets a specific date in the month and makes payment via deposit or in cash, according to the organization’s payment policy.
The percentage of this salary advance is previously defined and this voucher is deposited only to employees who choose it.
These advances, in so-called vouchers, not only require the responsible sector to know how the wage advance works, but also a thorough control of all payments.
This is because different financial management of variations in wages and percentages will be necessary .
This work, especially if done manually, can be doomed to payment errors and future labor lawsuits .
The ideal in this case is to automate the processes using payment management software .
2. Multi-benefit card
Many companies choose not to make the advance in cash and choose to provide the salary advance , through the so-called agreement tool, which is nothing more than a multi-benefit card .
The amount deposited on the card can be used for household expenses and purchase of medicines.
According to data from a survey by Alelo , in relation to household expenses, about 40 to 50% of the expenses come from pharmacy, food and culture.
Much is said that the multi-benefits card can also be a support for those who want to have greater financial control and need to spend their wages with greater responsibility.
Therefore, in addition to having the exact knowledge of how the salary advance works, the company in this case, is helping the employee to maintain well-being at work on time.
Helping you to even have a certain financial education in the use of your salary.
3. Salary on demand
Who never ended the month without money?
Or did you even have to resort to loans or savings to pay off some unexpected debt?
Thinking about this financial stress that many employees go through, a type of salary advance gains strength in the market, the so-called salary on demand .
With it, the company offers autonomy and flexibility so that the employee has access to part of his payment at any time.
This means that the employee can request, at the time he wants and needs, the amount of days worked. This feature can:
- attract and retain talent in the organization;
- generates financial well-being;
- increases productivity;
- decreases financial stress and etc.
The Xerpay is the new product of the Sherpa who manages the s wages on demand simply and effectively.
How to create a salary advance policy
Even though it is not part of specific legislation, it is essential that the company not only knows how the salary advance works, but creates an internal policy in relation to this benefit.
In this sense, the assignment of the salary advance becomes more transparent and organized , avoiding possible doubts about:
- the date of payment;
- adopted model.
In addition, it is important that the company is clear and objective with the employees regarding the policy of payments and advances , since their beginning in the company.
Salary advances and their competitive advantage
In a market where companies need to find alternatives to reduce turnover and retain talent, knowing how the salary advance works can help.
This is because investing in this strategy can be a great competitive advantage.
In addition to increasing the flexibility and participation of employees in managing their own money , the salary advance can improve and strengthen the bonds between employer and employee.
When there is no financial pressure, due to lack of money, the employee tends to worry less about personal things and his productivity increases.
And this is exactly the role of the salary advance, providing a greater financial balance to employees.
Do you want to know more about the salary advance facilities? Read the article “ What is Xerpay : learn how the payment on demand app works” from Xerpa about Xerpay – an innovative management software that facilitates payment on demand.
The Xerpay is the new product of the Sherpa that companies from all sectors can offer as employee benefits and grow loyalty and productivity.
Integration is quick and simple. As soon as your employees register, they can make withdrawals immediately.