Staff loans and salary advances

When you lend money to an employee, record it here. Payroll then deducts the agreed amount each month until it is repaid.

Before you start

You need Company Settings to enter a loan, and Journal Entries to approve it.
The staff loans account must be set in Payroll → Settings.

Go to Payroll → Loans & advances and click New loan.
Choose the Employee and the Type (staff loan or salary advance).
Enter the Amount, the amount to Deduct each month, the First deduction month, the date it was Paid out, and the bank or cash account it was Paid from. Click Save.
Someone else clicks Approve & pay out. The money is recorded as leaving the bank and owed by the employee.
From the first deduction month, each pay run deducts the monthly amount until the balance is zero. The loan is then marked Repaid.

The last deduction is only what is left, never more.
If an employee's pay can't cover the full deduction, payroll takes what it can without making net pay negative, and shows a warning on the run.
Each employee's page lists their loans and balances.

The deduction isn't on the run. The loan hasn't been approved yet, or its first deduction month is later. Approve it, then recalculate the run.
"This loan is on a pay run". Recalculate or cancel that run first. Once repayments are posted, a loan can only be repaid, not cancelled.