Does the salary advance have a discount? Understand how this payment method works

Does the salary advance have a discount?  Understand how this payment method works

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According to the law, until the 5th working day of the month following the month in which all employees work, they must receive payment of their salary. However, many companies work with advances, but does the salary advance have a discount?

There are two main ways to advance payment: the famous “vouchers” or the salary on demand.

The second option is a practice that has gained adherents in the market, mainly due to the benefits presented to the worker, such as greater productivity and level of satisfaction with the company.

Despite being more and more common, many doubts still exist around the theme, such as: does the salary advance have a discount? Who can apply for the salary advance?

In this article, we will address the main questions about the modality and explain what are the advantages of having the salary advance for employees. You will learn:

  • What is a salary advance ?;
  • Who can choose the modality ?;
  • Is there a maximum amount in the salary advance ?;
  • Does salary advances have a discount ?;
  • What are the benefits of the salary advance ?;
  • How to adhere to the salary postponement?

So, come on!

What is a salary advance?

The modality is nothing more than the advance payment of part of the worker's remuneration. The aim is to support employees who need the amount before the traditional salary receipt date.

It is worth noting that the CLT does not specify clear rules on it and the question remains: does the salary advance have a discount?

Despite not having this specific regulation, the law provides for the possibility of payment discounts if there is an advance payment, requested by the employee or offered spontaneously by the company. (Article 462).

There are three main types of salary advances:

  • OK: when the company sets a date to pay a percentage of the advance salary to employees who request it.
  • Multi-benefit card: the amount of the salary advance is deposited on a card that allows the payment of household expenses (such as food) and medicines.
  • On-demand salary: modality that allows the employee to request part of the payment related to the days worked when needed.

Regardless of the type of salary advance that the company decides to offer to the employee, there must be a good organization of the financial management and the correct control of the benefits offered.

Especially because, if the company is able to answer the question “does a salary advance have a discount?” it is easier to organize this process and eliminate the chances of errors in the calculations.

Who can choose the modality?

There is no rule in the law about the obligation to offer a salary advance, so not all companies offer workers the advance payment of part of the payment.

However, if the company adheres to one of the benefits mentioned in the item above, all employees must be entitled. There cannot be any type of restriction, be it by position or salary range.

Is there a maximum amount in the salary advance?

Despite not being regulated, it is the practice of the entire market that the wage advance does not exceed 40% of the employee's total salary.

In addition, it is necessary to consider the days worked in the month to calculate what will be the amount paid in advance. But is the salary advance discounted? We will talk about the topic below.

Does the salary advance have a discount?

Does salary advances have a discount or not? As previously mentioned, UK residents labor laws provide for a discount on the salary advance. Article 462 provides that:

“The employer is forbidden to make any discount on the employee's wages, except when the latter results from advances, legal provisions or collective agreements.”

Discounts on wage advances will generally only appear in the final payment of wages and should be included in the pay stub.

That is, the advance payment may come without the EHIC discounts and the percentage of other benefits (such as the transportation voucher), but the amount will be calculated on top of the total amount of the salary at the time of receiving the remaining amount.

What are the benefits of the salary advance?

Now that we know the answer to the initial question in this article – whether a salary advance is discounted? – let's talk about the advantages of offering salary advances to employees.

Investing in salary advances directly impacts the your collaborator's well-being. The benefits cover both the worker, who receives the advance, and the company, which offers the facility.

Some surveys already show that employees with financial problems have a drop in productivity.

THE Employee Financial Wellness Survey survey, for example, identified that 35% of professionals reported distraction at work due to problems related to personal finances.

In addition, almost half of the interviewed employees spend 3 hours or more of the workload trying to resolve these issues.

Salary advances in talent retention

It is evident, therefore, that employees with a good financial life tend to be more productive, as they have less reason to worry personally. The salary advance assists companies in several points, including talent retention.

O PayActiv Impact Report survey of 2021 indicated that 81% of respondents tend to stay in their current job because they have the benefit of payment on demand.

Consequently, companies that have already adhered to this type of salary advance pointed to a 30% growth in talent retention rates. In addition, 22% of professionals, who have the option of advancing their wages, avoid loans.

How to adhere to the salary postponement?

If your company does not yet have any of the wage advance modalities, before offering the benefit to the worker, it is necessary to structure the finance department and prepare all the items before you start.

The worker's payroll must be updated, as all information and discounts on the salary advance must be included in the pay stub.

Without organized financial management there is a great chance of making mistakes that harm the company's finances. To assist in this process, there are already software that act as intermediaries for payment on demand.

In this post on our blog, we talked a little more about how to provide the salary advance.

HR Consultant UKy is the solution

This is the case with the HR Consultant UKy platform, one of the HR Consultant UK, which offers the application for employees to withdraw their wages at any time, thus reducing financial stress.

The system is very simple, just that the human resources sector offers a login and password for each employee. From there, the employee chooses how much and when to withdraw, which instantly falls into the chosen checking account.

To request the advance, the professional needs to have days worked available and, if done before the closing of the company sheet, it will be discounted from the current month.

Example: if the payroll starts on the 20th of each month, all withdrawals made up to the 19th will be deducted from this month's salary. From the 20th, the discount will only be made on the next salary.

Talk to a consultant and learn more about HR Consultant UKy clicking here.

At HR Consultant UKy, is the salary advance discounted?

Yes. There is a single fee at the time of withdrawal, which can vary between R $ 2 and R $ 9. There is also the possibility that the company that contracts the software subsidizes a monthly withdrawal amount for each employee.

If we consider that the wage advance makes it possible to settle the bills on time, avoid paying interest rates on overdraft and requesting loans, having the opportunity to withdraw the money at the time you want, is a great facility.

O HR Consultant UKy, which has been in the market for almost 2 years, grows steadily – in 2021 alone it grew more than 8 times – it is yet another platform to assist financial management and simplify the worker's daily life.

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