Do You Really Need That Salary Advance? Here’s A Beginner’s Guide.
As the name implies, a salary advance is receiving your income (or money) ahead of schedule. For example, suppose your pay is paid monthly on the 25th of each month. As the saying goes, desperate times call for desperate measures, so if you have an unanticipated financial emergency on the 10th, you can request a salary advance from your employer. As a result, your next salary, which was intended to be paid on the 25th, will now be paid on the 10th, thanks to your consent.
The Ugandan Employment Act, of 2006 regulates the payment of wages to all classes of workers. The Act requires an employer to make timely payment of remuneration to the employees. 25% of our population earns less than 1,570,000 UGX and 75% earn more than 1,570,000 UGX. Additionally, 50% of the population is earning less than 2,830,000 UGX. According to Salary Explorer, a person’s salary doubles their starting salary by the time they cross the 10-year experience mark. This only emphasizes that for many of us, salary advances are necessary for our daily lives, given the nature of our economy.
How does salary advance work?
The most important thing to understand is that a salary advance operates in the same way as any other loan, which means it comes with terms and conditions. While some smaller businesses may agree to your request with a handshake and a nod of understanding, most companies will require you to sign a small agreement document acknowledging the salary advance, which details the amount, repayment schedule, and permission to allow the company to deduct future salaries for repayment.
When it comes to the payback period, there is no set rule that governs it. Whether you want the company to deduct the lump sum amount from your next salary or deduct a predetermined amount over some time is up to your employer’s discretion and how you express your request.
What is the procedure for requesting a salary advance?
Before you try to solve your financial problems with a salary advance, make sure you check with your employer to see if it’s authorized or if they have a policy against it. Salary advance policies are sometimes published online or in the employee handbook.
So, should I think about getting a salary advance?
It’s appropriate to seek financial aid from your employer if your financial position at the moment is severe enough to impede your work performance and if it will help you get out of your financial crisis. However, remember that it should only happen once and not become a habit. Furthermore, your employer is not obligated to support you financially and may turn down your request without hesitation.
