Do you have employees who get paid in cash?   

employees getting paid in cash

Still, there are employees who prefer to get paid in cash and were you aware of how to manage that? Effectively managing cash payments to employees requires careful planning and attention to detail. Whether it’s a common practice in your industry or a choice for tangible transactions, these five essential strategies serve as your reliable guide to ensure transparent, compliant, and secure handling of cash payments.   

1. Establish Clear Payment Procedures:  

Establish clear guidelines for cash payments, clearly detailing when and how they will be distributed. Think of it as creating a monthly schedule where employees precisely know the dates and methods for receiving their pay. This straightforward process builds trust, ensuring a seamless compensation experience and reducing any potential confusion among employees.   

2. Maintain Accurate Payroll Records:  

Imagine running a business with several employees. Implementing a strong payroll system would involve using advanced software to keep detailed records of each employee’s earnings, any deductions, and the resulting net pay. It is similar to a detailed ledger that not only provides transparency to employees regarding their compensation but also simplifies the process of reporting taxes and adhering to regulatory compliance. This ensures that financial records are accurate, accessible, and in compliance with all necessary regulations, ultimately fostering a smooth and organized payroll process.  

3. Ensure Compliance with Labor Laws and issue payslips:  

Maintaining strict compliance with labor laws pertaining to cash payments is paramount to avoid legal pitfalls and ensure a smooth employer-employee relationship.  

In the context of cash payments, it’s essential to note that the rupee component should be disbursed in the relevant month, while the cents part is carried forward to the subsequent month. Ensuring compliance involves fulfilling the commitment of timely payments to employees and maintaining meticulous records of these transactions.  

In addition, providing detailed payslips remains a critical practice in a cash payment system, not only because it’s a legal requirement but also because a payslip serves as a breakdown of the net pay, offering employees a transparent view of their earnings. This allows employees to understand their financial transactions and reinforces trust in the payment process.  

4. Implement Secure Cash Handling Procedures:  

Setting up strong rules for dealing with cash is like putting a strong shield around the money part of your business. Security is paramount when dealing with cash payments. Ensure that the process of handing over cash salaries is secure and conducted in a controlled environment. Always be mindful to designate responsible individuals for the disbursement process and consider implementing additional security measures to prevent any mishandling or misappropriation of funds. Having these strict cash-handling rules is crucial for making sure both the business and its employees are financially safe.  

5. Encourage banking facilities:  

In the digital age, while some employees prefer cash payments, encourage them to utilize banking facilities. Providing options like direct deposit or electronic payments, in addition to cash, ensures your employees have flexibility in how they receive their earnings. This way, they can choose the method that suits them best, whether it’s the traditional feel of cash or the convenience of a direct deposit into their bank accounts. This not only aligns with modern payment trends but also caters to the diverse preferences of your workforce, ultimately enhancing the overall efficiency and security of your payment processes.  


Cash payments don’t have to be a hassle! Plan paydays, meticulously track everything, and store cash securely. And don’t forget to stay compliant with Sri Lankan regulations and explore modern tools. By focusing on the above we mentioned, businesses can navigate the complexities of cash payments while ensuring transparency and security for both the company and its employees.  

Keep your employees informed and involved and say goodbye to payroll headaches! Everyone wins! 

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