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:

  1. Assign the deduction to the payee.

  2. Enter details of the loan or advance by using variables.

  3. Manage loan or advance payment deductions as part of the normal payroll processing calculations.