Modifying and Updating the Loan Deduction

The deductions delivered for employee loans have ownership set to PS Delivered/Not Maintained. Loan deductions are not statutory deductions and therefore the rules associated with the deduction vary according to company policies. You must configure the deductions according to your organizational requirements. For example, you should consider how to set up arrears processing for loan deductions:

• Do you want the system to perform net pay validation to prevent negative net pay?

• Are partial amounts allowed?

• How are arrears paid back?

If you select Perform Net Pay Validation and loans arrears exist, you may want to include the loans section in the process lists for supplementary runs and off cycle processing.

Deduction recipients for loans are determined by a formula, LOA FM DED RECIPNT, that is attached to the loan deduction on the Recipient page. Defining deduction recipients for loans is discussed in the Setting Up Deduction Recipients topic.

Setting up deduction elements is part of the Global Payroll core application.