Enables you to set up an employee loan including the loan amount, the duration of the loan, the type of interest and the interest rate. Once a loan has been set up, you can suspend the loan for a specified number of pay periods, or terminate the loan as of the next pay period, providing you are not in the pay cycle.

Note: Setting up a loan using this screen also adds the loan pay element and its balances to Employee Pay Elements - Details.

Note: If you enter a loan type incorrectly, you must delete the loan line and re-enter the details.

Paging Area

Note: You can only amend loan details or delete a loan prior to the loan effective date.

Start

Enter the date on which the loan is due to start. You can have multiple loans starting on the same date, providing they are of different types and have different capital pay elements.

Type

Enter the type of loan, or select one by clicking window to display Loan Type Selection. The loans available are set up in Loan Template. Once a loan type has been selected, the pay elements are populated with the default pay elements that have been assigned to the loan type, although they can be amended if required.

Capital

Enter the total value of the initial loan advance.

No.

Enter the number of repayments to be made if the loan is over a fixed period.

Note: You must enter either the number of payments to be made in the No. field, or the amount to be repaid in the Deduction field, depending on the loan interest type.

Rate

Enter the annual interest rate applicable to the loan as a decimal number, for example, 4 or 5.49, without any other characters.

Deduction

This field is not enabled for loans with an interest type of C as the amount is calculated automatically. Enter the amount to be repaid each period if it is a fixed repayment.

Suspend

Enter the number of periods that you want to suspend making payments. If you suspend the loan, the interest is still calculated each pay period and added onto the capital.

Terminate

Enter Y if you want to terminate the loan in the next pay cycle. If you choose to terminate the loan, the interest is calculated and added to the remaining capital amount, and this entire amount is deducted in the next pay cycle to close the loan account.

Note: This field is automatically set to Y when an employee becomes a leaver, to ensure the outstanding loan amount is recovered and the loan is terminated.

Capital PE

Enter the ID of the pay element to use for the loan capital deductions, or select one by clicking window to display Pay Element Selection.

Note: You cannot use the same pay element for more than one employee loan, if they are active at the same time.

Interest PE

Enter the ID of the pay element to use for the loan interest deductions, or select one by clicking window to display Pay Element Selection.

Benefit PE

Enter the ID of the notional pay element to use for the taxable benefit element of the loan, or select one by clicking window to display Pay Element Selection. The benefit element of the loan is calculated as the difference between the official interest rate, and the loan interest rate. If this is a negative value, that is, the loan interest rate is higher than the official interest rate, then the benefit element = 0.  The official interest rate is maintained via Dated Parameter Maintenance.

Payments Made

Display only. The number of payments made.

Last Deducted In

Display only. The period in which the last payment was made.

Notes

Click window to display Maintain Note Detail, where you can enter any notes or comments you want to record.

Detail

Click window to display Loan Details, where you can view details of the payments made and a breakdown of the capital, interest and benefit elements of the loan payment.

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