Labour Kharchi & Advance Salary: How to Track and Deduct Without Disputes
Quick answer: record every kharchi or advance on the day you give it, with the amount, date and payment mode. Keep small weekly kharchi separate from bigger advances or loans. At settlement, deduct kharchi in full and deduct advances in agreed instalments, then show the worker a statement with the remaining balance. Most kharchi disputes come from entries that were never written down or were written in a separate diary.
Kharchi vs advance: what's the difference?
- Kharchi is small cash given during the week or month for daily expenses: food, travel, phone recharge. It is deducted in full from the next wage settlement.
- Advance (uchant) is a larger amount given for something specific: a festival, a wedding, medical costs, travel home. It is usually recovered over several weeks or months.
Treating both the same way is the first mistake. A worker who took ₹10,000 for a family wedding cannot repay it from one month's wages, and trying to do so pushes them to quit.
Why kharchi causes so many disputes
- Written on a scrap of paper or in a diary nobody else sees
- Given by a supervisor and never told to the owner
- Worker remembers ₹2,000, owner's diary says ₹3,000
- Advance deducted all at once without warning
- No running balance, so nobody knows what is still owed
A simple kharchi system that works
- Write it down the same day. Amount, date, who gave it, cash or UPI.
- Prefer UPI for bigger amounts, so there is a record on both sides.
- Set a kharchi limit. For example, kharchi cannot be more than what the worker has already earned this week.
- Agree the advance repayment upfront. For example ₹2,000 per month until cleared.
- Show the balance at every settlement. Earned, kharchi deducted, advance instalment, net paid, advance remaining.
- Do not deduct too much at once. Wage laws limit how much can be deducted from a worker's wages in a period (generally, total deductions should not exceed half the wages). Leaving the worker with too little also makes them quit.
Worked example
Suresh earns ₹600 a day and worked 26 days in October. He took ₹1,000 kharchi each week and a ₹10,000 advance in September for his sister's wedding, repaid at ₹2,000 a month.
- Earned: 26 × ₹600 = ₹15,600
- Kharchi: 4 × ₹1,000 = −₹4,000
- Advance instalment: −₹2,000
- Net paid: ₹9,600
- Advance remaining: ₹10,000 − ₹2,000 (September) − ₹2,000 (October) = ₹6,000
When Suresh sees this statement, there is nothing to argue about.
Festival season: plan for advances
Around Diwali, Chhath and Holi, many workers ask for an advance to travel home. Decide your rule before the rush: how much, for whom, and how it will be recovered. Keep the festival advance separate from any Diwali bonus you give.
Track kharchi automatically in HajariBook
In HajariBook, tap Pay next to a worker, enter the amount, choose advance or payment and cash or UPI. The entry is saved against that worker with the date. At settlement, the app deducts kharchi and advances from the wages calculated from daily attendance, and shows the running balance. Share the statement on WhatsApp so the worker sees the same numbers you do.
Frequently asked questions
What does kharchi mean?
Kharchi is small cash given to a worker for daily expenses before wage settlement, deducted from their wages later.
Can I deduct the full advance from one month's salary?
It is better not to. Agree instalments, and keep total deductions within legal limits so the worker still receives a fair amount.
Should a supervisor be allowed to give kharchi?
Yes, if every amount is recorded the same day where the owner can see it. Unrecorded supervisor kharchi is a common leak.
How do I show kharchi to the worker?
On the salary slip, with dates, and the remaining advance balance.