To record a loan, go to the employee profile, select Loans, enter the loan amount, disbursement date, EMI amount or number of instalments, and interest rate (if applicable). Zoho Payroll creates the repayment schedule and begins deducting from the next pay run. The outstanding loan balance is visible in the employee profile at all times.
Loan EMI deductions reduce net salary each month. They appear as a voluntary deduction on the payslip. Since EMI is not a statutory deduction, it does not affect PF, ESI, or TDS computations. However, if EMI plus statutory deductions reduce net salary below a minimum threshold, the employer should review the loan amount.
If an employee prepays the loan or exits the company, Zoho Payroll supports a lump-sum loan closure entry. On exit, the outstanding loan balance can be deducted from the final settlement payment. Zoho Payroll tracks the full loan history, including disbursement, monthly deductions, and closure, for audit purposes.
The Loan module in Zoho Payroll allows employers to record salary loans disbursed to employees and automatically recover them through monthly EMI deductions in the pay run. The outstanding balance is tracked in the employee profile until full repayment.
No. Loan EMIs are voluntary deductions and do not affect statutory computations like PF, ESI, or TDS. They are applied after gross salary and statutory deductions are calculated, reducing only the net take-home amount.
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