• Overview
• Basis of all systems
• Survival system
• Developing systems
• Cash and accruals accounting
• Advances and loans
  • Personal advances and loans
  • Programme advances
• Financial reports

• Case studies
• Resources

Personal advances and loans (page 2 of 2)

Policy for salary advances and staff loans

It can be difficult to set a workable and accepted policy for granting or refusing salary advances and staff loans.

There are also financial risks in granting loans as they may be difficult or impossible to recover, if the staff member leaves the organisation or the programme closes before the loan has been repaid.

A policy of never granting salary advances or loans may create far less ill feeling than a well-intentioned system of allowing them. One alternative for lower paid staff who have difficulty budgeting on a monthly salary is to pay their salaries weekly or fortnightly.

If salary advances and staff loans are given, make sure that:

• Requests for all salary advances and staff loans are considered by one designated person.
• Payment and recovery of approved salary advances and staff loans are made by the same person who pays the salaries.
• Details of all salary advances and staff loans and their agreed repayment dates are recorded in the file or system used for paying salaries. This is so that they are recovered as agreed. See Salary advances and staff loan register

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