Legislation does not directly stipulate how much of the salary should be paid to employees for the first half of the month. Managers shall set out in their regulations the option of paying an advance that suits them. So, what is an advance on a paycheck in simpler language? It is the amount received by the employee on account of the future monthly salary, as well as a convenient form of cooperation between the employer and the contractor.
What should you know about an advance?
As already mentioned, there is no such concept as “advance payment” in labor legislation. At the same time, tax legislation contains the concept of payment for the first half of the month, which is called an advance in practice.
In simple words, an advance is something like a prepayment. It is the first part of calculating the employee’s services, which is paid within the calculation period. It is about the following accruals:
- a share of the official salary calculated as a ratio to the time spent on work;
- subsidies for work in dangerous production, for climatic peculiarities of the place of work;
- allowances for night work;
- subsidies for part-time work or for replacing an employee during his absence.
This payment does not include all kinds of increases and bonuses – all is accrued only after the end of the working month.
Non-payment of material labor compensation to an employee is considered gross non-compliance with the law and leads to punishment for the employer.
Legislation does not regulate the size of the advance payment. As a rule, employers decide this issue independently. They must write a condition on the advance payment amount or the method of determination in the collective or labor contract or agreement.
The payment amount may be set as a percentage of the monthly wage rate (salary) or in a fixed amount. The amount does not necessarily have to be the same for all employees. Moreover, an employer may set the advance payment for some employees as a percentage of the monthly wage rate and for others – in a fixed amount.
A few words about a fixed advance
It means a fixed monthly payment to employees. If the team is small and all employees receive roughly the same salary with the exact amount in currency written in the labor agreement, this would violate the employee’s rights. If we consider newly hired employees, they are paid for the first half of the month on a common basis, even if they have worked only a few days in the period included in the calculation.
The money is usually issued in the company’s accounting office against signature in cash (the old method). However, today, transferring it to the employee’s card is becoming more common. Moreover, a person has the right to refuse the services of the bank where the organization is serviced and to provide the details of his bank no later than five days before the money is received. For this, you write a request to the head of the organization.
Features of the calculation
Salary should be paid in the national currency. The date of payment of wages, including an advance payment, is stipulated in the employment contract.
The employer has the right to independently determine the order of advance payment once a month or more and without it during the agreement process with the whole team or an individual employee. In practice, advances and salaries are not paid more than once a month.