Pay Items, Pay Item Liabilities, Pay Item Rollups
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      3. Pay Items, Pay Item Liabilities, Pay Item Rollups

      Setting up an Employee Loan/Advance and the Repayment thereof

      In MYOB Acumatica you can set up a deduction to manage repayments from an employee loan or advance

      Introduction

      Loans or Advances to an Employee can be made either from within Payroll OR by advancing such funds to the Employee via Cash Payments from Outside the Payroll Module

      1. If you have the need to issue an employee with an advance or loan, you can advance it to the staff using a post tax allowance, and recoup the money in subsequent pay using a reducing balance deduction.
        To setup an advance or loan, the employee must first be allocated an allowance (Post Tax) for the amount of the advance.

        OR

      2. If the Employee has been provided with an Advance or Loan from outside of Paroll, there is simply a need to recoup the Loan via a Deduction in Payroll.
        MYOB have provided a link to instructions of how this can be achieved HERE.

      Before you begin

      1. Setup an Account to be used to clear/reconcile the Loan.The following screenshot shows the Ideal Chart of Accounts Entry:
        COALoans
      2. Create General Ledger Purposes to be used in the Pay Items, then add these GL Purposes to the appropriate Posting Classes and select the Account Created above.
        GLPurposeLoan
        GLPurpPostClassLoans

      Disclaimer: This information about how to use MYOB Acumatica is of a generic nature and is based on information supplied by MYOB. Not to be relied on for legal, accounting or employment advice.

      Creating an Allowance for the Initial Loan/Advance

      Set the Allowance up with the following settings:
      AllowLoan

      1. Allowance Description:
        Enter an appropriate Label for example "Employee Loans" or "Employee Advance"
      2. Type: This can be set to either Income or Allowance
      3. Set Taxation to Tax-free (Paid after Tax)
      4. Calculation Method:
        Should be set to "Amount"
        1. Amount:
          Leave the Amount as Zero so that the amount can be entered as necessary
      5. Additional Info:
        1. VISIBILITY
          1. Show on Payslip
          2. Show Calculated Dollar Value
        2. OVERRIDE VALUE
          1. Standard Pay
          2. Current Pay
      6. General Ledger Purpose:
      Select the appropriate GL Purpose created above

       


      Setting up a Deduction to Recoup the Loan/Advance

      Set the Deduction up with the following settings:
      DeductLoan

      1. Name:
        Enter an appropriate Description for example "Staff Loans" or "Loan Repayment"
      2. Taxation: Select Not Taxed Normal After Tax Deductiion
      3. Type: Select Deduction
      4. Calculation Method:
        Should be set to "Amount"
        1. Amount:
          Leave the Amount as Zero so that the amount can be entered as necessary
      5. Additional Info:
        1. VISIBILITY
            1. Show on Payslip
            2. Show Calculated Dollar Value
        2. OVERRIDE VALUE
            1. Standard Pay
            2. Current Pay
        3. DEDUCTIONS
          1. Reducing Balance Calculation : This can be selected if the Loan is to be paid off over a period of Time.
          2. Deduction Category: Set this to Net Pay Disbursement
        4. ANALYSIS
          1. General Ledger Purpose: Select the appropriate GL Purpose created above
      6. Pay Item Liabilities:
        These Pay Items should be setup as follows
        PayItemLiabLoan


          Issuing the Initial Loan or Advance

          1. Open a pay and select the employee.
          2. Click + and select The Loan Allowance or Income Item created above
          3. Amount:
            Enter the Full Amount of the Outstanding Loan/Advance
            • Click 'Save' to save the allowance and Pay.


            Using the Deduction to Repay the Advance

            If using a Reducing Balane Deduction, you need to add the Reducing Balance Deduction to the employees Standard Pay so that it will be added to each subsequent Pay automatically.

            1. Open the 'Employee Pay Details' and select the Standard Pay.
            2. Click the 'Add' button to add the 'Deduction' created earlier.
            3. Deduction code:
              Enter the deduction code
            4. Amount:
              Enter the amount to be repaid regularly (this can be left blank and be completed each pay)
            5. Reducing Balance:
              Enter the Total Amount of the Advance/Loan (this can be less that the original Advance if it has already been partially repaid)
              Note: If the Cost Centre was not entered into the 'Deduction', enter it now (remember this cost centre should also be used for the deduction so that the amounts are offset).
            6. Click 'Save' to save the Deduction and Standard Pay.
              AddDeducttoStandard

            Repayment in the Subsequent Pays

            In each subsequent Payrun, the deduction will automatically be included:
            Deduct in Pay

            The summary of the deduction appears as follows:

            DeductSummary

            Questions?

            If you have more questions, please contact BusinessHub's support desk on 1300 733 071 or raise a Support Case.