Regulations on salary advances and strict management of advances

In business, work salary advance for employees is not a rare occurrence. The following article Vindoo will introduce to you detailed information about the regulations and procedures for salary advances for employees as well as how to manage advances effectively.

Cases where employees receive salary advances

Pursuant to the provisions of the 2019 Labor Code, employees are entitled to salary advances in the following cases:

• Employees receive salary advances according to the agreement with the employer.
• Employees receive a salary advance while temporarily off work to perform their civic duties for 1 week or more.
• Employees receive a salary advance during their annual leave period.
• Employees who are paid based on product and time are paid according to the agreement of both parties. If the work has been completed over many months, each month they will receive a salary advance.

Corresponding to each specific situation, the advance level and salary advance period will be different.

Insightly CRM

Pursuant to the provisions of Clause 3, Article 97, Article 101 and Clause 5, Article 113 of the 2019 Labor Code, regulations on the advance salary level and maximum salary advance period of employees for a number of specific cases as follows:

In case of salary advance according to agreement:

• Conditions for salary advance, salary advance level and salary advance time are mutually agreed between the employee and the employer.
• The employer is not allowed to charge interest on the salary that the employee advances according to the agreement.

In case of temporary leave from work to perform civic duties for 1 week or more:

• The law requires employers to give employees a salary advance corresponding to the number of days the employee is temporarily absent from work to perform civic duty for 1 week or more but not exceeding 1 month's salary. according to the labor contract and the employee must repay the advance amount.
  

In case of salary advance during annual vacation:

• When annual leave is not yet due, the employee is paid a minimum amount equal to the salary for the days off.

In case of payment based on product or piecework for work that must be performed over many months:

• Employees who are paid based on product or volume are paid according to the agreement of both parties. If the work has been done for many months, each month they are paid according to the volume of work done monthly.

Other regulations

Clause 2, Article 101 of the 2019 Labor Code stipulates that the employer must give the employee a salary advance corresponding to the number of days the employee must take leave from work to perform civic duty for 01 week or more, but no more than 1 week or more. no more than 01 month's salary according to the labor contract and the employee must repay the advance amount. However, in cases where employees enlist in accordance with the provisions of the Law on Military Service, they are not entitled to salary advances.

Therefore, in principle, if a conscripted employee is required to participate in military service, he or she will not be entitled to a salary advance. Employees can agree with the employer on salary content as prescribed in Clause 1, Article 101 of the 2019 Labor Code.

Salary advance process for regular employees

Step 1: The employee prepares an Advance Request form

The first step in the salary advance process is that the employee must make an Advance Request form, write correct and complete information to serve as a basis for sending to the functional department.

Step 2: The employee submits the advance request to the department head

After completing the paper form, employees must first consult their department head. If approved, the department head will sign the paper, approving the request. 

Step 3: Submit to the director for approval of the advance payment 

After the department head approves, the employee continues to submit the request to the director for review and approval. 

Step 4: Transfer payment to accounting to record payment vouchers

The accountant will act when the employee's advance application has been approved by the director. The accountant's task is to verify the correctness of the declared content on the advance payment application, then write an advance payment slip with the signature of the person making the slip. The advance payment voucher form written by the accountant is also prescribed in the law - Form No. 02 - TT according to Circular 200/2014/TT-BTC. 

Step 5: Chief accountant approves expenditure

The expense accountant who writes the payment voucher will also have to submit it to the Chief Accountant for review and approval. 

Step 6: Submit to Director for approval 

After the chief accountant signs off, the payment accountant sends the salary slip to the director for approval again

Step 7: The treasurer pays salaries to employees 

The treasurer will base on the payment slip with all the signatures of: the employee who needs the advance, the voucher accountant, the chief accountant and the director to disburse the approved proposed amount to the employee 

Step 8: Check and store documents 

Accountants need to record all documents and applications in the accounting books according to the correct subjects. Documents that need to be stored include: advance payment application, advance payment documents with full information and signatures of relevant parties. 

Simplify with advance management software - Vindoo Employee Advance

For In the traditional process of salary advance, accountants in businesses must prepare many report forms according to the process and store a lot of related documents to be able to present to superiors if needed later. Many steps and cumbersome paperwork lead to a lot of time being wasted when accountants make salary advances for each employee in the company

Currently, Vindoo has launched advance management software Vindoo Employee Advance with application for advance request and approval anytime, anywhere. As long as you have an Internet connection, you can make a salary advance simply and easily

Features and advantages of the software Vindoo Employee Advance: 

• Paperless advance process
• • Implement all processes in the software system - minimize paperwork.
  • Managers can approve Advances at any time as long as there is an internet connection.
  • Data is always accurate and consistent throughout the system.

• Keep track of all employee advance requests
• • Manage all Advance Requests at one interface.
  • Filters are available and customizable, allowing the Advance list to be divided by Department, Employee or Status to control income and expenditure, make advances, and reconcile.
• Automatic and accurate accounting
• • No more recording documents or manually entering excel tables.
  • Accounting entries arising during the Payment, Reconciliation and Refund processes are automatically recorded, quickly and accurately
• Easy Control
• • The Advance Control interface automatically displays all accounting entries related to the requester.
  • Accountants can easily select each accounting entry that needs to be reconciled and completed.
• Advance statistical report
• • Automatically synthesize employee debt tracking data and export reports to excel files.
  • The report is compiled with many available criteria (measures) and presented visually and vividly in the form of: dynamic pivot table, line graph, row and column graph.

Above Viindoo has compiled and shared with you basic information about salary advance in every business. Hopefully this article will help you to simplify the process of calculating salary!