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I'm not insensitive to the fact that extreme levels of financial stress/poverty can make people act out of character.

I don't know much about cost of living in Pakistan but what you're paying him is substantially above the annual average household income in the country, which might indicate that he's either experiencing some additional pressures or (and I hate to say it) he's just skimming.

Obviously you are quite within your rights to just report him to the police and wash your hands of the situation. If however you want to see if this is just a desperate person doing desperate things and give him a chance you could talk with him, calmly explain that you know what he's been doing and offer him a chance to tell his side of the story.

Then you can make a call - if he's struggling to make ends meet on the wage, particularly if it is something that is transient (medical bill or whatever) then you have the option to officially pay/loan him the money and stress that stealing is unacceptable and that you won't tolerate it again but that you are prepared to at least listen to him if he comes to you with issues.

If you think he's skimming or his story doesn't add up or whatever then you can either fire him or fire him and report him.

Regardless I don't think turning a blind eye to it is the right way to go.

Edit: There appears to be some uncertainty around the actual wage figure being paid here - I initially read the salary in the question as being 20,000 PKR (courtesy of the comma acting to my UK-based brain as a "thousands" separator I assume) - so if that is the correct figure then my answer and calculations still hold. If it's actually the 2,000 figure then that does change things a bit - 2,000 PKR a month is quite a bit below the national average - and if the employee is the only one earning for their family then it would be very easy to imagine a scenario where stealing might be the only way they can keep their family from starving! I think I'd still recommend the same approach of talking to them as I describe, but I have to say I'd be leaning much more towards the notion of this being desperation rather than skimming!

He is still a very trust worthy person for me because he helped me in my difficult times.

I would doubt that this is true.

The fact that this person has helped you before doesn't justify him stealing money from you in the present. If any, this person is being disrespectful to the trust you had in the past.

If you should fire him is up to you, but you should definitely bring this up to him, and talk about the incident in person, so you can work it out in a way you consider adequate. Anyways, stealing is a serious offense, in some contexts it can mean immediate firing, if not prison or something else, so this is not something to be taken lightly

should i fire him from job or should i talk to him about this?

I would talk to him about this, and then fire him. I would do it now before he steals more.

I was part owner of a small business in the past. One thing that was absolute was that theft simply cannot be tolerated. We had to fire one of our original employees for stealing. She was also caught on camera. It was tough to do, but it was the right thing.

I once worked for a supermarket chain. One of my young coworkers was fired for stealing a $0.19 pen from the adjoining store. It sent the clear message to all the other employees that stealing was simply not tolerated.

It doesn't matter if this employee is a nice person. It doesn't matter if they helped you out in the past. Right now, this person is a thief. And if you tolerate one thief then you need to expect all your other employees to follow suit. That's no way to run a business.

Talk nicely. Offer to help him in his new job search. But fire him immediately.

He can't stay.

If he's stealing from you now, he'll steal from you again even if he promises not to. My family owned a small business for about 50 years and employees that were caught stealing always went back to their old ways even when given a second chance.

You need to fire him, but you definitely don't need to report him to the police.

While I have no direct knowledge of how the legal system works in Pakistan, I suspect that you might ruin his life or cause him much greater harm than he has caused you.

If you have the money and like him, you can just tell him that you don't need him anymore, and give him some severance pay. He'll know why he's being fired. There's nothing to be gained by punishing him.

If you were a big corporation with an HR department, things would be different, but this is your place and you can run it as you wish.

If you had a better system for keeping your accounts, you would have known money was missing from the till at the end of each day without the security camera.

You probably need that level of basic accounting (i.e. checking that the total of the till receipts matches the amount of money in the cash drawer), whoever you employ. Otherwise, they will soon figure out that they can get away with skimming the till, and once they have found out where the security camera is, they will figure out a way to hide from it (e.g. one employee stands in a position that blocks the camera's view while another one takes the money).

Of course that basic check doesn't catch every thief, because a "sale" might not be put through the till at all - the customer's money goes straight into the thief's pocket not into the till, especially if the customer isn't bothered about having a printed receipt (and I assume that in Pakistan, there will be some customers who won't care about a piece of paper that they might not be able to read anyway).

If you don't want to fire the guy for personal reasons, a "subtle" way to deal with this is to tell all your staff that from now on, there will be a daily check for missing money. If you do find anything has gone missing, put a notice somewhere that all the staff (but not the customers) can see, with a record of when and how much you have lost.

Unless the thief is really stupid, he will get the message that keeping his fingers out of the till in future is probably a good idea!

In Argentina, you keep them. You consider the cost of what they're stealing and the cost * risk of what they might steal in the future, and if that is greater than the cost of firing him, hiring a replacement, training a replacement, the risk of the replacement not being as good as this person and the risk of the replacement also stealing, then you keep them.

Of course, if you think any form of theft must absolutely be punished, and this is more important to you than having an otherwise good employee, then you already have your own answer. You have your answer as well if you believe a person stealing a small amount of money from you is worse than allowing a family to starve.

You should be very careful in what responsibilities you assign this person in the future, because if you allow this to keep happening it can scale out of your control. One sure way to control this would be to talk to them and tell them that you know, and that they shouldn't do that. Don't do it as a reprimand, since their own consciousness is already punishing them enough (and if it isn't, then you should re-evaluate whether you keep them or not). Try to find out why they are doing this. Remember, they helped you in the past. Do they need your help now? Can you help them?

As Dmitry Grigoryev mentioned in the comments, you should also take into account how whatever decision you make will affect other employees. In this sense, be VERY careful to not send neither the message that stealing is OK nor that you won't help people who've helped you in the past.

Is this your own pharmacy or are you managing it for a larger company?

If it's your own pharmacy, it's your decision. I can't say what would be most appropriate, as it is much more about cultural norms than anything else at this point. In the U.S., the person would pretty much have to be fired, as knowingly tolerating this could cause you to lose the licenses and certifications required to handle some controlled-access medications, which I assume would be essential to your business.

If you're the manager and the pharmacy is owned by a larger company, there should be clear guidelines for you to follow. If you aren't certain, call whomever you report to and ask for guidance.

If he needed more money he could have asked for a raise. If his family was starving, as some people here assume, he could have explained this to you and asked for a raise.

If I was caught stealing I 100% expect that I would get fired. My boss wouldn’t be able to trust me. He might get into legal trouble if he kept me employed and I did something worse. So yes, he should be fired.

You might have a discussion with him, and there might be exceptional circumstances, but that is unlikely.

Tell him you know he wouldn't steal from you unless he really needed it. Therefore you're going to raise his salary by the amount he has been stealing.

But if it ever happens again he will be dismissed on the spot because you need to know you can trust your employees so you can't tolerate stealing.

Stealing is a Crime !

You seem to have lost sight of this absolutely fundamental fact.

Call the police. Drop into a station and ask them what to do. It is their job to handle such things.

Also note : if he steals money, does he also steal drugs ? Does he take in prescriptions which he knows are false ? This could be the tip of the iceberg - criminals actions like theft rarely stop at one thing. This one person could do tremendous damage to you, your business and your reputation and indeed your family.

Any policeman will tell you that when you uncover one small lie, it's often the start of a trail of lies, sometimes leading to the discovery of bigger (and unrelated) crimes. It's your duty to tell the police.

He is still a very trustworthy person for me because he helped me in my difficult times.

Understand that criminals often do project a nice and trusting personality - it's part of the requirement of getting into a trusted position. As your own indecision shows, it also helps keep them from being punished.

Don't fall for that old con.

Should I talk to him about this or report him straight away ?

Police first. Get advice from people who understand crime.

It's what they're there for.

Or let him fulfill his needs by stealing that little amount of money.

No it's not OK.

If this person simply needed more wages, then they should simply have asked for a raise. You don't sound like an unreasonable person, so they presumably have no reason to think you would be unreasonable.

What they are doing is wrong. There are many good people who would do your job and never steal from you under any circumstances. Why should this person get the benefit of your kindness when they have no moral right to it ?

Stealing is a bad habit

Stealing is a crime. That all.

Would you steal ? What would it take to make you steal ?

It is an exploitation of your good nature.

, and I want to share this with him, and make him aware that I know about this incident, but I don't know why I feel guilty about the idea of bringing this up to him.

Do not confuse your morality with this persons. My experience is that criminals feel a sense of entitlement and have no real sense of right and wrong. No amount of telling them about right and wrong will give them one.

My view is that this person has cynically manipulated you and your trust. You feel guilty because they want you to feel that way.

I, unfortunately, have dealt with too many crooks who do these things. It's what they do. It's a plan, part of how they get into positions of trust and exploit them for as long as possible with the minimum of consequences.

Do not let this person get away with it.

Mercy is for the court (if it ever reaches court). They can decide, with a more complete knowledge of the individual's circumstances and true history, what sentence if appropriate - a fine, repay victim, perhaps prison. That's what courts are for.

You may not really know the person you think you do. Five years may sound like long enough to know someone, but I've seen ongoing thefts from employers that went back twenty years when people started digging into the facts.

In my opinion case is simple, he is stealing money from you, case closed. Fire him or call police.

From other hand, if you feel like you owe him something, for helping you in past or being good friend or/and employee, talk to him.
Offer him help, maybe loan, maybe rise his salary. But under any circumstances do not let him steal more money.

If you own the pharmacy, and the money in the register is indeed your own money, and you have video evidence of this employee taking that money then you should report him to the local police and terminate their employment.

I appreciate your predicament which reflects your care towards your employee.
Stealing, though a sin as well as a crime, is a reflection of an immoral way of satisfying some lack.

As you mentioned he is from a poor background and since I don't know his age, family and circumstances, might not be able to make assumptions but running a family on less than 15 dollars a month, would be hard. Here in India a pharmacy helper would get at least 50-100 dollars.

As an Argentinan wrote that in Argentina they would be retained, I would suggest the same and also, if you can manage increase around 300 PAK ruppes /3 dollars (if you can afford it financially) letting him know you are aware of his stealing and encouraging him to be honest of his intentions than resorting to immoral means. Forgiveness and love is the message of all our religions and at these situations, we must show kindness to people, in image, of our messengers.

However if you want to punish him, best fire him but reporting him to the police will make his life miserable, as poor people are treated really bad by police of most countries.

And like you said 'stealing is a bad habit ' and something which can be unlearnt, easely.

All the other answers are right regarding stealing and whatnot. But by your question it seems that there may some value that you hold, some regard for your employee and their situation that has caused you to not immediately fire this person.

Given that, one thing you might consider is to give your employee a raise which is roughly equal to the amount stolen in a given period of time. It sounds like he is stealing at most 2.5% per month, which is not out of line with what a raise could be. But most important is the reason to which the raise is attributed. Instead of letting on that you know about the theft, instead praise the employee for their honesty, trustworthiness and character, and convincingly tell them that you are giving them the raise because of your trust in them that you do not have to be constantly watching them, and believe it when you say it. Do not even let them know there is any chance that you could be checking up on them or that it would enter your mind.

Then after this very closely and without them knowing observe if the thefts stop after this. If possible, make sure that nobody knows that you are ever watching the tapes so it can't get back to this person. If the person continues to steal after this, then you can with a clear conscience immediately fire the person, and with some righteous indignation justified as they have now betrayed the trust that you just expressed in them, it is like they spit in your face after you helped them. Your praise of them when they knew they did not deserve it should have triggered feeling of guilt and remorse and a desire to do better. For them to continue to steal after you providing them with the extra they seemed to need now only proves that they are merely greedy and untrustworthy.

On the other hand, if the thefts stop then you can start to gain some confidence in this employee again. They might never fully reclaim the trust that they lost, as you never know when they might relapse and you may want to check up on them from time to time, but at least they have retained their job and can support their family and have at least shown some repentance.