Tracking Loans

This chapter provides an overview of loans in Brazil and describes how to:

Define loans.
Create deduction assignments for loan schedules.
Calculate loan payments.
Adjust loan payments.

Understanding Loans in Brazil

It is a common practice for Brazilian companies to grant personal loans or pay for assets and services on behalf of their employees. Loan functionality for Brazil enables you to maintain these loans, create payback schedules and modify the deduction of such values previously loaned to employees. You can adjust the loan by any rate and change the value of the deduction. On termination, the outstanding balance must be deducted. The loan may be deducted from normal payroll, vacation, 13th salary or termination.

Note. Loan payments in Brazil are via a fixed amount only. This amount may change month-by-month depending on the life cost factor. The life cost factor can be handled by Global Payroll rules with a variable to indicate the percentage to apply for each loan payment.

Viewing Delivered Elements

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Brazil. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 9.0 PeopleBook.

Defining Loans in Brazil

To define loans in Brazil:

Set up the details of a loan and a loan repayment schedule on the Loans page.
Process the payroll.

This section discusses how to define loans.

Page Used to Define Loans in Brazil

Page Name	Object Name	Navigation	Usage
Loans	GPBR_LOAN	Global Payroll & Absence Mgmt, Payee Data, Loans, Request Loans BRA, Loans	Define loan information and a repayment schedule for an employee. Enables you to enter loans and related data required for the loan process, which are populated in Global Payroll to enable loan paybacks. This page distributes the loan total amount in the number of periods or payments you specify and populates required data in Global Payroll to deduct paybacks.

Defining Loan Assignments

Access the Loans page.

Loan Definition

Element Name	Select the element name (deduction) that corresponds to the loan.
Loan Number	Enter the loan (reference) number for the specific employee loan.
Start Date	Enter the date on which the loan was provided to the employee.
Total Amount	Enter the total amount of the loan, and specify the currency corresponding to the amount

Loan Schedule Setup

Periods or Payment Amount	Enter the number of payment periods or the amount of the loan payments. When the system generates the loan schedule it calculates the other value.
Begin Date	Enter the date on which the loan repayment begins. The begin date must be after the loan's start date.
Frequency ID	Specify the frequency of the loan repayment. Values are Weekly, Biweekly, Semimonthly, and Monthly.
Create Schedule	Click to create the loan schedule. In the Loan Schedule grid, the system displays a single row with the begin date and end date of the loan payments, along with the payment amount. (The end date or the payment amount is calculated automatically based on the information you entered.)

Note. Be sure to define the same begin date as in the periods you defined on the Periods page or the Automatic Period Creation page in the core application.

Loan Schedule

You can enter the loan schedule manually, or have the system create it by clicking the Create Schedule button.

Begin Date and End Date	Enter the begin and end dates for the period of time on which the payment amount is valid.
Payment Amount	This is the flat amount that is to be deducted from an employee's payslip.

Note. To create the loan schedule you must define periods, begin date and frequency or Amount.

Creating Deduction Assignments for Loan Schedules

After you define a loan schedule, the system automatically creates a deduction assignment for each loan schedule (Global Payroll & Absence Mgmt, Payee Data, Assign Earnings and Deductions, Element Assignment by Payee). This is performed by the component interface. The process inserts a deduction assignment with some supporting element overrides like the following:

Field	Variable
Loan Number	EP VR REF EMP (Loans Reference)
Loan Amount	EP VR TOTAL DEVIDO (Loan Amount)
Total Amount	EP VR TOTAL (Loan's Total Amount)
Date	EP VR DT PAG EMP

All of these variables are used by the process to keep track of each loan balance separately. These variables are also used to calculate the deduction for each loan.

Note. Remember to define the variables listed in the table above when entering your loans outside of the Loans page.

Calculating Loan Payments

Loan payments (using deduction EMPRESTIMO) are calculated using formula EP FM EMPRESTIMO.

Whenever you calculate a given pay process (such as normal payroll, vacation, 13th salary or termination) the system checks if there is any outstanding loan installments for the employee in that month and whether there are adjustments. Loan payments are then automatically deducted from the employee’s salary. After the deduction, the system stores these values for historical purposes.

Note. The EMPRESTIMO deduction cannot exceed 30 percent of net pay.

Adjusting Loan Payments

Adjustments can be handled using Global Payroll rules. If you want to adjust the amount of the loan payment deduction you create a new deduction which provides a rule to reflect adjustments (changing amount or applying a factor to the deduction).

There are three methods used to adjust loan values:

Apply a rate to the loan principal value and then divide this value by the number of installments, to make them fixed values.
Apply a monthly rate on the total due value of the loan and subtract the agreed fixed portion plus adjustment.
Adjust only the agreed fixed portion of the installment by a monthly rate, disregarding the principal value of the loan.

Although there are companies that charge interest on loaned values, this situation is uncommon.