> ## Documentation Index
> Fetch the complete documentation index at: https://docs.filexpress.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Employee Loans

> Loans and advances with automatic payroll deduction

The loans module records the money the company lends to its employees and recovers it automatically by deducting an installment in each payroll.

## Register a loan

**1. Go to Human Resources → Employee Loans → New Loan**

**2. Select the employee and write a description**

For example "Personal loan" or "Salary advance". Loans are only granted to active employees.

**3. Enter the amount and the installment per payroll**

The form shows the approximate number of installments. The installment cannot be greater than the amount.

**4. Set the grant date and when to start deducting**

It is deducted in payrolls whose period ends on or after the **Deduct from** date.

**5. Save**

## Payroll deduction

When generating the payroll, FileXpress automatically deducts the installment of each active loan:

| Rule | Detail |
| - | - |
| **Timing** | After the income tax is calculated: the installment does not reduce the taxable base for ISSS, AFP, or income tax. |
| **Last installment** | It is the remaining balance, even if it is less than the agreed installment. |
| **Insufficient net pay** | The installment never leaves the net pay negative: what is possible is deducted and the rest is left for the next payroll. |
| **Skip an installment** | In the payroll's employee selection, the **LOAN** switch appears with the outstanding balance; turn it off to not deduct in that period. |
| **Cancelled or deleted payroll** | If the payroll had not been paid, the deductions are reversed and the loan recovers its balance. |
| **Zero balance** | The loan automatically changes to **Paid**. |

The deduction appears on the employee's pay stub as *Loan: (description)*.

## Tracking

The table shows, per loan, the amount, the installment, the progress paid, the balance, and the status (**Active**, **Paid**, or **Cancelled**). The detail shows each payment, with its origin (payroll or manual), and from there you can:

| Action | Description |
| - | - |
| **Record payment** | Payment outside payroll (cash, transfer). It cannot exceed the balance. |
| **Delete payment** | Manual payments only. Payroll payments are reversed by cancelling the payroll. |
| **Cancel loan** | Forgives the outstanding balance (agreement, uncollectible). Payments are kept and it is no longer deducted in payroll. |
| **Edit** | With payments recorded, only the description, installment, and notes can be changed. |
| **Delete** | Only loans without payments. |

## Final settlement

If the employee has outstanding loans, the [final settlement](https://docs.filexpress.app/en/docs/rrhh/finiquitos.md) shows a notice with the balance. If it should be deducted, record it in **Other adjustments** (as a negative) and then record the payment or cancel the loan.

## Accounting

Set up the **Employee loans** account (receivable account) in [Accounting Settings → Payroll and Provisions](https://docs.filexpress.app/en/docs/contabilidad/configuracion.md#payroll-and-provisions). In the payroll accrual journal entry, the deducted installments are recorded as a **Credit** to that account.


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