Employee loans
Loans are recovered as an EMI deduction in each payroll run until they're paid off.
Before you start
Set up loan types in Payroll configuration → Loan, including the interest type and the installment limit in months. For low-interest loans in India, map the taxable benefit in Loan perqusite mapping.
Give a loan
- Go to Employee Loans and add a loan.
- Choose the employee and loan type, and enter the amount, interest, number of installments and the month recovery starts.
- Save. The EMI is deducted from the employee's pay from that month.
Each payslip shows the loan recovered and the outstanding balance.
Change a loan
| Action | Effect |
|---|---|
| Prepayment | Record an amount the employee paid back directly. Paying the whole outstanding balance closes the loan. |
| Pause | No EMI is deducted in pay periods up to and including the month you choose. Clear the month to resume. |
The loan shows its Outstanding amount at all times.
When an employee leaves
The outstanding balance can be recovered in the full and final settlement.