Employer Loans
SimplePay has a built-in item with which to record employer loans. There are two steps you need to follow:
Setting Up Loan Instalment¶
To add an employer loan:
- Go to Employees and select the relevant employee.
- Click on Add next to Regular Inputs and then Employer Loan.
- Enter the relevant information.
- Click Save.
If you are going to charge the employee interest, enter the Interest rate.
Regular repayment is the total amount that will be deducted from the employee’s pay each period. If you are charging the employee interest, the interest is never deducted directly from the payslip, but is rather added to the outstanding balance.
Please note: You will not be able to remove this item until the Closing balance on the previous finalised payslip is zero. If this item was added in error and you wish to remove it from the employee’s profile completely, it must be removed from the first payslip on which it was added.
More information can be found in the following article:
Editing Loan Balance¶
Adding a loan to an employee tells SimplePay that the employee has a loan, but the loan will not yet have a balance, so no repayments will take place. To set a balance, click on Employer Loan under Payslip Inputs and enter the amount next to Balance Increase.
By default, an increase in the loan balance is paid out on the current payslip and repayments start only on the next payslip.
If you don’t want to pay out the amount on the payslip, check Don’t pay out balance increase. You will then also have the option to check Balance increase is at beginning of period, which means repayment will start on the current payslip instead of the next.
Please note: If the balance you’re entering is the closing balance from the previous period, both checkboxes mentioned above should be checked.
Entering a Once-off Repayment will override any regular repayment defined for this loan – on the current payslip only. You can also tick the Cash/EFT repayment (no effect on payroll) box if the repayment was made off payroll and is being recorded on SimplePay to decrease the loan balance.
More information can be found in the following article: