How to record an Advance Paycheck or Employee Loan
- Write an AP check to the employee for the requested amount.
- In Payroll, create a Deduction code that is after tax, and update account distributions.
- Set the employee's deduction to deduct a fixed amount each month until loan is paid; you can use the limit field to make sure you don't withhold too much from the employee for the loan. The example below shows a fixed amount deduction of 20.00 until the limit of 100.00 is reached.
4. When payroll is processed, the deduction will be taken from the employee's net check amount and credited to the account you assigned in the Account Distribution screen (step 2).