The Employee Loan Program is used for the automatic dispersal of an employee loan and the automatic payroll deduction. A detailed description of all transactions is displayed.

You may not give a loan payment to an Employee through the Employee Loan Program.  This program is to be used for paying the company back for the loan via the paycheck. This avoids the loan being counted as an Earning in Payroll and being added as a taxable amount. The loan should be given to the Employee though "Voucher Entry" in ACCOUNTS PAYABLE (7.1.1). Once given, the check must be Flagged as Paid in the Employee Loan Program.

The Total Loan Amount is the amount of the loan before any payments have been made. The Payment Amount is the amount to be withheld per the Loan Frequency. Valid Payment Frequencies are: D = Daily, W = Weekly, B = Biweekly, S = Semi-Monthly,  M = Monthly. The number of payments and final payment amount will be displayed. The GL Account Number is the General Ledger Account number to apply the loan amount to. The description will automatically be displayed. A freeform comment is available for your reference. The history of the loan payments will be displayed. When a loan has been given to the employee, through “Voucher Entry” in ACCOUNTS PAYABLE (7.1.1), you must flag the loan as posted. This tells the system that the loan has been given and allows the Payroll deductions of the loan to be started. Enter an <F> at the “Enter Selection” prompt to flag the loan. Once flagged, you will enter the check number and check date of the loan to the employee. The Loan Balance will then be displayed and updated with each Payroll deduction.

Once the loan has been started (flagged and saved) you may only change the Payment Amount and the Payment Frequency fields.

You may Cancel a Loan. This will stop the payments from being taken out of the employee’s paycheck. Once cancelled, a comment will be displayed showing the date of the cancellation and the balance of the loan at the time of cancellation. At the “Enter Selection” prompt enter a <C> and press <ENTER>. You will see the prompt: “Are you sure you want to cancel this loan?” To cancel the loan, enter a <Y> and press <ENTER>.

Once Cancelled, a Loan cannot be Un-Cancelled. Take care when using this feature.