Third party loan
In Profit you can register loans that have been paid to the employee by a third party, and you can then deduct the repayments from the wages and pay these out to the third party. This method is widely used in the Netherlands Antilles and Aruba.
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Description
With this type of loan the employee has a loan agreement with a third party (the lender). The lender pays the principal sum to the employee and draws up a repayment schedule, with interest.
With this type of loan you need to record the following data in Profit:
- Principal sum
Total amount to be repaid, including interest and costs.
- Repayment schedule
The periodic instalments as agreed between the lender and the employee. In Profit we use the term 'repayment', but the instalments are in fact total amounts, including interest and costs. It is the responsibility of the lender to determine the instalments, you only need to make sure that the instalments are paid to the lender.
- Bank account number and payment reference of the lender
You must record this data in Profit so that you can include the payments to the lender in the payment file.
In this description we will assume that you are using the integration with Profit Payroll for the repayments to the lender.
As already mentioned Profit will not apply an interest calculation for this type of loan.
RAE entry
You cannot change repayments in periods that have already been approved, because you cannot reverse payments. If you change a repayment amount from a provisionally processed period, Profit then will initiate an RAE entry. Also, you cannot add repayments to periods that have already been approved.
Changing the principal sum will not result in an RAE entry. The principal sum is paid by the lender, so there is no interest calculation in Profit.