Loans
Efficiently manage employee loans and monthly repayments
Agrigistics’s payroll system allows you to efficiently manage employee loans and their monthly repayments. There are two types of loans available:
Payroll-Processed Loans:
These loans are disbursed directly through the employee’s payslip.
The specified loan amount is added to the employee’s payslip, and monthly repayment deductions are automated during payroll processing.
The loan balance and repayment details are transparently displayed on the employee’s payslip for easy tracking.
External Loans:
These loans are issued directly to the employee outside of the payroll system.
Repayments can still be tracked by recording balances and deductions in the payroll system, even though the initial disbursement was done externally.
This approach allows for flexible loan management while maintaining accurate records within your payroll system.
In the following sections, we will detail how to set up, disburse, and track repayments for both types of loans.
There is no interest on loan amounts paid out to employees
Loan Setup & Configuration
In Agrigistics, loans are set up as a specific type of deduction within the pay run templates. This configuration allows for efficient management of multiple loan types while maintaining clarity and transparency on employees’ payslips.
Key features include:
Multiple Loan Accounts: You can configure multiple loans, each representing a distinct loan balance or account. For example:
A loan for medical expenses.
A loan for issuing protective equipment.
Simultaneous Repayments: Employees can repay multiple loans concurrently, with each loan maintaining its own balance and repayment schedule.
Payslip Transparency: All loan balances, repayment amounts, and deductions will be clearly displayed on the employee’s payslip. This ensures transparency for employees regarding their outstanding balances and ongoing repayments.
In the next section, we will guide you through the steps for configuring these loans and incorporating them into your payroll process.
Create a new Loan Template
A loan pay run template is only created once and can be reused multiple times on one or more employees.
Navigate to Payroll, Pay run templates
Click on the "Add template" button to start.
Enter a Template name for this loan
You can add a Description that will also be displayed on the payslip - but this is Optional.
Select Deduction under pay run type.
Select Loan under Deduction Type
Make the Loan repayment amount zero
Click on Add to save the loan template.
Please see below video:
Loans Key Terms
Before outlining the validation limitations for capturing loans, it's important to define the following key terms:
Loan Balance: The amount the employee owes to the company.
In the portal, the balance appears as a negative value to indicate the employee’s debt to the company.
In the pay run, negative values are displayed in brackets (e.g., -R10 is shown as (R10)).
Loan balances cannot be more than zero—if a repayment would bring the balance above zero, the payroll system will automatically adjust the repayment amount.
Opening Balance: The loan balance at the start of the current pay run period.
This value always matches the closing balance of the previous pay run.
Opening balances cannot be changed as they reflect the balance before any payouts, adjustments, or repayments in the current period.
If migrating with existing loan balances, they are loaded as Balance Adjustments and will reflect in the closing balance. This ensures transparency that the balance was adjusted.
Formula:
Opening balance = Closing balance of the previous period
Closing Balance: The projected loan balance at the end of the current pay run after factoring in payouts, adjustments, and repayments.
Closing balances cannot exceed zero.
Formulas:
If no payout in the period:
Closing balance = Opening balance - adjustments + repayments
If a payout occurs in the period:
Closing balance = Opening balance - payouts - adjustments
Note: When a loan payout is made, no repayment will be processed in that period to ensure the employee is entitled to the full payout amount.
Loan Inputs & Validation Rules
When capturing loans for employees in the pay run, three different inputs can be provided within the following parameters:
Payout: The amount disbursed to the employee via their payslip.
The payout amount must be greater than zero.
A payout increases the loan balance.
Note: Repayments are ignored in the event of an payout to ensure the employee is entitled to the full payout amount.
Adjustment: Modifies the employee’s loan balance.
Adjustments can be positive or negative, as long as the closing balance does not exceed zero.
Positive adjustment → Increases the employee’s debt to the company.
Negative adjustment → Reduces the employee’s debt to the company.
Repayment: The amount deducted from the employee’s pay to repay the loan.
The repayment amount must be positive.
The repayment amount cannot exceed the loan balance (i.e., an employee cannot repay more than they owe).
If the loan balance is less than the repayment amount, the payroll system will automatically adjust the repayment amount to ensure the employee only repays the outstanding amount.
Add loan template to an Employee
You can view our video below that will show you how to add the loan in bulk and by individual employee, please refer to the documentation below the video for the written steps:
After creating a loan template, you can assign it to an employee using one of the following methods:
Navigate to Payroll / Pay runs. Select the pay run where the employee is located, click on the employee name and surname. OR Navigate to Payroll / Employees. Select the employee and manage pay run templates. Click on Payroll on the left hand sub menu.
Click on Manage pay run templates.
Click on Add Templates in the Link recurring pay run templates sections.
Locate the loan template that you want to use and click on it - while you are in the block - click on Override.
Enter the details:
Loan Pay Out: This will very very very rarely be used and this will only be used if the value of the loan is PAID to this employee as part of this current payslip.
Balance adjustment: You will add the full value of the loan that was taken here. Please note: If the loan is already on the payslip and has a balance the amount that will be added here will be added to whatever the current balance is. It won't replace it.
Loan Repayment: This will be the amount that gets deducted from this period going forward.
Click on Create Create Override.
Bulk manage Loans for Employees
From the pay run screen, you can efficiently manage loan payouts, balance adjustments, and repayments for multiple employees at once using the bulk management feature.
Navigate to Payroll > Pay Runs and select the desired pay run.
Use the checkboxes to select the employees you want to add the loan to.
Click on Import Pay Run Templates
Select Import Loans to open the bulk management panel.
Select the appropriate loan from the drop down.
Choose the Values to Manage NOTE: In most cases you will select Balance Adjustment. But this is the summary of all three of the options:
Payout: This will very very very rarely be used and this will only be used if the value of the loan is PAID to this employee as part of this current payslip. Add loan payouts for all selected employees and specify their repayment amounts. These payouts will be disbursed through the employee's pay runs and increase their nett pay.
Balance Adjustment: Adjust the opening balances for the loans of all selected employees and provide repayment amounts. This is useful if the loan funds have already been disbursed, or if the company has already covered the loan costs.
Repayment (Only): Adjust only the repayment values while leaving the balances and payouts unchanged.
If you selected Balance Adjustment and clicked on Next you will see the below screen:
Enter the Loan balance to the Balance adjustment block and the amount that needs to be repaid in the repayment block Remember: If everyone has the SAME balance and the same repayment amount you can click on Manage, and then Set Uniform amount. Then you can add in the balance and the amount and click on Apply to all. Alternatively you can also import an Excel spreadsheet.
Click on Recurring.
View Loan balances
Loan balances can be accessed and managed in three different locations:
Employee Pay Run View
Pay Run Cost Report
Payroll Loans & Savings Report
Below are detailed instructions for each option:
Loan Balance (View and Edit): Employee Pay Run
You can view opening and closing balances for individual employees and make adjustments as needed.
Navigate to the employee’s pay run view and select the Payroll tab.
Select the Deductions tab to view all the employee’s deductions.
All separate loans for the employee will be listed under their deductions.
Balances: Loan balances are indicated as negative values, they represent how much money the employee still owes.
Opening Balance: This represents the balance when the pay run template was added, excluding any movement in the current pay run. If the loan template was added during the current pay run, the opening balance will always show as R0.
Closing Balance: This is the balance after all transactions (payouts, adjustments, and repayments) are accounted for in the current pay run. Note that if a loan payout is made, no repayment will occur in the same period to ensure the employee receives the full loan amount. In the event of a payout, the repayments will begin in the next pay period.
Template Notifications:
In the event of an adjustment or payout, notifications will appear. Hover over each notification for detailed breakdown on the amounts.
Repayment Amount:
The amount deducted from the employee's salary each period for loan repayment.
If a loan payout is made, it will appear as a negative deduction (e.g., -R100 will display as (R100)). Payouts increase the employee’s net pay without being classified as an earning.
Edit Template:
Click the Edit button next to the loan template to access the override screen. Here, you can adjust the payout, balance, or repayment values.
Opening and closing balance calculations will indicate the movement for the current pay period.
Remove Template:
Click Remove next to the template.
If the loan is not fully repaid, the template can still be removed; however, the remaining balance will still be associated with the employee. You will receive a Health Notification in the pay run, indicating an employee with an outstanding loan balance and no repayment.
Pay Run Cost Report
Use this report to view all loans and savings balances for employees included in the current pay run. It also reflects any adjustments and payouts made during the period: Current Pay Run
Payroll Loans & Savings History Report
This report provides an overview of all loans and savings balances for employees across different pay runs, offering a comprehensive view of outstanding balances, adjustments, and repayments over time: Loans & Savings History
Loan Balance on the Payslip
Loan balances are shown on the payslip following the pay out of a loan to an employee. The payslip will typically display the initial loan payout, any loan deductions made, and the remaining loan balance. Please see the image below as an example of a Directly paid loan payout, a loan deduction and the loan balance:
Please be aware that the earnings and deductions added to an employee’s payslip are based on system templates and as such, cannot be directly edited or removed from the payslip itself. Any changes or adjustments must be conducted through the Loans & Savings module.
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