Loans and salary advances

Lend an employee money or give a salary advance and recover it from salary each payroll month, automatically and to the paisa.

A loan or salary advance is paid back from salary — one instalment each payroll month until nothing is left. Payroll recovers it for you.

Before you start: recording a loan for someone and deciding advance requests need Full control on People (HR). Any employee can ask for their own advance.

Record a loan or advance (HR)

  1. Open People › Payroll and switch to Loans.
  2. Click New loan.
  3. Pick the Employee and the Kind: Salary advance or Loan.
  4. Enter the Amount, for example ₹60,000, and Recovered per month, for example ₹5,000 — the box shows how many months that takes. For an advance, leave it blank to recover all of it in one month.
  5. Choose the First month recovered and add a Reason.
  6. Click Record. It is active at once: "Recorded — payroll recovers it from the first month".

Ask for an advance (employee)

  1. Open People › Payroll › Loans & advances.
  2. Click Ask for an advance, fill in the amount, the monthly recovery, the first month and a reason, and click Ask.
  3. It goes to your approver through the usual approvals. Nobody can approve their own request. Until it is decided you can cancel it.

How recovery works

  • Every payroll run deducts the month's instalment as a Loan recovery line on the payslip, showing the balance left.
  • The recovery is taken last, after every other deduction, and never pushes net pay below zero. Whatever could not be recovered that month stays outstanding, and the run warns you.
  • Amounts are exact; the last instalment is just what is left.

Manage a loan

The Loans view shows Outstanding, Recovered per month and Waiting for approval. Open a loan to see its schedule (Month, Amount, Balance after, Recovered or Due) and:

  • Pause / Resume — skip recovery for a while.
  • Change terms — the monthly recovery, the first month or the reason (the amount only before anything has been recovered).
  • Record a repayment — money paid back outside payroll, with the date received.
  • Close — writes off what is still outstanding; payroll stops recovering it.

Note: the money you pay out is not posted to Accounting by People. Record the disbursal in your books yourself.