Understanding Loans and Advances
Many companies in India grant payees loans that are then deducted over a specified period of time from the payee's pay, at a specified interest rate or as an interest-free loan. Additionally, some companies advance a payee a specified amount against future pay and the advance is then deducted from his or her pay over a period of time. Global Payroll for India enables you to manage such loans and advances.
Note: Global Payroll for India supports the basic calculation of loan with balances; calculation with compound interest and reducing balances is not supported.
To set up and manage a loan or advance, you:
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Assign the deduction to the payee.
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Enter details of the loan or advance by using variables.
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Manage loan or advance payment deductions as part of the normal payroll processing calculations.