How to set up 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 the 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.
- 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).