TalinoHR

Loan Management

4 min read

TalinoHR tracks employee loans and automatically deducts amortizations during payroll processing. This covers government loans (SSS, Pag-IBIG) and company-provided loans.

Loan Types

TalinoHR supports three loan types:

  • SSS Loan: Loans from the Social Security System (salary loan, calamity loan).
  • Pag-IBIG Loan (HDMF): Loans from the Home Development Mutual Fund (multi-purpose loan, calamity loan, housing loan).
  • Company Loan: Internal loans provided by the employer (cash advance, emergency loan, etc.).

Creating a Loan

To create a new loan record for an employee:

  1. Navigate to Payroll → Loans (/payroll/loans).
  2. Click "Add Loan" or "New Loan".
  3. Fill in the loan details:
    • Employee: Select the employee.
    • Loan Type: SSS, Pag-IBIG, or Company.
    • Principal Amount: The total loan amount.
    • Monthly Amortization: The fixed monthly deduction amount.
    • Start Date: When payroll deductions should begin.
    • Term (months): The loan repayment period.
  4. Save the loan. It will be created with status ACTIVE.

Loan Fields

  • Principal Amount: The original loan amount borrowed.
  • Monthly Amortization: The fixed amount deducted per month from payroll.
  • Total Paid: Running total of all payments made so far.
  • Remaining Balance: Principal minus total paid. Updated automatically after each payroll run.
  • Status: ACTIVE (deductions ongoing), PAID (fully settled), or CANCELLED.

Automatic Payroll Deduction

Loan deductions happen automatically during payroll computation at Step 14 of the payroll engine:

  1. The engine fetches all ACTIVE loans for the employee.
  2. For each active loan with remaining balance greater than zero:
    • The monthly amortization amount is used as the deduction.
    • For semi-monthly payroll, the amortization is divided by 2.
    • The deduction is capped at the remaining balance to prevent over-deduction.
  3. A LoanPayment record is created for each deduction, tracking:
    • The loan ID
    • The payroll run and payroll item
    • The deduction amount
    • The balance remaining after payment
  4. The loan's totalPaid is incremented and remainingBalance is decremented.
  5. If the remaining balance reaches zero or below, the loan is automatically closed (status set to PAID).

Over-Deduction Protection

The payroll engine caps each loan deduction at the remaining balance. If an employee's remaining balance is P150 but the monthly amortization is P500, only P150 will be deducted, and the loan will be marked as PAID.

Recomputation Handling

When a payroll run is recomputed (e.g., to correct attendance data):

  1. All existing LoanPayment records for that payroll run are reversed.
  2. The corresponding loan balances are restored (totalPaid decremented, remainingBalance incremented).
  3. If a loan was auto-closed by the original run and now has a positive remaining balance, it is reactivated to ACTIVE status.
  4. The payroll engine then re-runs the loan deduction step with fresh data.

This ensures loan balances are always accurate even after payroll corrections.

Payment History

To view the payment history for a specific loan:

  1. Navigate to Payroll → Loans (/payroll/loans).
  2. Find the loan in the list.
  3. Click the payment history button/icon to open the payment history dialog.
  4. The dialog shows all LoanPayment records: date, amount, payroll run reference, and balance after each payment.

ESS Loan View

Employees can view their own loans through the Employee Self-Service portal:

  1. Navigate to ESS → Loans (/ess/loans).
  2. The page shows all loans (active and paid) for the logged-in employee.
  3. Each loan displays: type, principal, monthly amortization, total paid, remaining balance, and status.
  4. Employees can see payment history but cannot create or modify loans.

Final Pay and Loans

When an employee separates from the company, outstanding loan balances are deducted from their final pay:

  1. Navigate to Payroll → Final Pay (/payroll/final-pay).
  2. Select the separated employee.
  3. The final pay computation includes all active loan remaining balances as deductions.
  4. After processing, the loans are marked as PAID.

Tips

  • Set up loans before running payroll to ensure deductions are included in the next payroll run.
  • The monthly amortization should match the official amortization schedule from SSS or Pag-IBIG.
  • For semi-monthly payroll, the system automatically splits the monthly amortization across two pay periods.
  • Monitor the Loans page regularly to track employees nearing full repayment.
  • Cancelled loans stop all future deductions but do not reverse past payments.