Government employees will receive their September salaries by Wednesday, the head of the civil servants' union Bassam Zakarnah said Tuesday.
The Ministry of Finance in Ramallah informed the union that wages for civil servants in the West Bank and Gaza were distributed to banks on Tuesday, Zakarnah said.
In recent months, the Palestinian Authority has twice failed to pay employees on time and in full. Officials had blamed a shortfall in aid from Arab states for the fiscal crisis.
The PA is largely reliant on foreign donors to make up its yearly budget. It also receives tax and tariff revenue that is collected by Israel and delivered periodically.
Zakarnah applauded Arab and European governments for their continued financial support to the Palestinian Authority.
Meanwhile, he said threats by the US Congress to block aid to the PA "cast doubt on the US attitude towards Palestinian people's rights."
In August, the US Congress decided to block $200 million in aid to the PA over President Mahmoud Abbas' decision to apply for full membership of the United Nations.
Zakarnah noted that this contradicted previous remarks by US President Barack Obama.
In September 2010, Obama told the General Assembly that he hoped "an independent, sovereign state of Palestine" would be admitted as a new member of the world body in September 2011.
"The Palestinian people will not compromise freedom and statehood with any price," Zakarneh said.
Palestinian Monetary Authority Governor Jihad al-Wazir told Reuters in September that the withdrawal of US aid would have "a major impact on the economic situation in the West Bank."
"Really, the risk of a PA collapse is very real under the financial strain, without US assistance, without donor assistance in general," he said in an interview on the sidelines of the Blouin Creative Leadership Summit.
The PA employs about 170,000 people in the West Bank and Gaza, where its employees continue to receive salaries even though the Hamas government has replaced them with its own civil servants.
Pro-Israeli US groups have publicly supported maintaining aid to the PA.
The Israel Project has lobbied Congress members over fears that cuts could undermine US-funded security cooperation between Israel and the PA.
J Street, a Jewish-American advocacy group, said in a statement that blocking aid would "hurt Israel's interests by undermining moderate Palestinian leadership and defunding productive security cooperation."