SYMPTOM:

Your organisation issues loans to employees that they are supposed to re-pay back through a set of pre-defined instalments. The instalment amount is automatically reflected in the figures for gross dedeductions. However, against the instalment of the current month's payroll, the employee defaults by a certain amount. You need to get this value while generating salary for the employee, so it may be conveniently put into the pay-slip. How to get it?

RESOLUTION:

The System provides a function named UNREALLOAN() in the Formula Builder for heads of pay (HOP). It takes the name of the loan/advance scheme as the parameter. Thus, if there is a scheme named 'CAR LOAN', then you may define an HOP with the following formula: UNREALLOAN('CAR LOAN').

Example

Let there be a loan instalment whose instalment date falls within the current period. So deduction will be made on account of that instalment. Let the amount be, say for example, 1120.00 (at this point of time we are not bothering ourselves with the rules set for calculation of interest). Let gross earnings for a particular employee be only, 1000.00. As such, the entire instalment amount can not be deducted from his salary. Two situations may occur:

• You may have rules in effect for prioritywise deductions

In this case, as per the priority of deductions, the System will calculate how much amount can will get carried forward to the next period. Accordingly and automatically, the related loan instalments will be modified. The function will simply return the amount being carried forward. Even if you manually review the particular instalment, to carry forward a desired amount, this entry will be over-ridden by the rules for prioritywise deduction at the time of generation, so you will find your review entry over-written appropriately. Thus, if we have Minimum amount as 0.00 and Paid Type as 'Partial Amount', as the rule for priority wise deductions, then in our example, a value of 120.0 will be observed.

• No rules for priority-wise deduction are being set

In this case, the System does not any automatic carry forward operations. Whatever amount you manually carry forward, against the loan instalment, that amount will be returned by this function, at the time of generation. Suppose, the loan instalment is reviewed, such that the amount to deduct is set to 720.0 (against an instalment amount of 1120.0). Thus, an amount of 400.0 is manually carried forward (as per any chosen carry-forward method). Upon generation, this function will return a value of 400.0.

When the System automatically carries forward - this always affects the following period. However, when you carry forward manually, it will not be mandatory for you to put the effect on the next period.