BrightPay Cloud does not have a dedicated feature for “staff loans”, but you can easily manage employee loans and their repayments by using custom addition types and deduction types. This article explains how to:

• Record the loan payment as an addition 
• Manage loan repayments using deductions 
• Use the available repetition options 
• Monitor the outstanding loan balance

Recording the Loan Payment as an Addition

When you grant a loan to an employee, you may wish to record this on their payslip for transparency and payroll history.

Step-by-Step Guide

1. Go to the Employee’s Pay Section
   • Locate the relevant employee in your payroll and open their pay items for the current period.
2. Add a Custom Addition Type
   • Click to add a new Addition Type and give it a clear name, e.g. “Staff Loan”.
   • Enter the loan amount to be given to the employee for that period.
   • If desired, set any default options for how this addition should behave in future periods.
3. Save and Review
   • The addition will now display as a separate item on the payslip and will increase the employee’s net pay for that period.

For detailed instructions on adding and amending addition types, see:

• Adding & Amending Addition Types

Managing Loan Repayments with Deductions

To recover the loan, you should set up a custom deduction and apply it to the employee’s pay for each repayment period.

Step-by-Step Guide

1. Go to the Employee’s Pay Section
   • Open the employee’s pay items for the relevant payroll period in which you wish to make a loan repayment.
2. Add a Custom Deduction Type
   • Click to add a new Deduction Type. Name it something clear, such as “Loan Repayment”.
   • Choose the required calculation method from the drop-down menu.
   • Enter the repayment amount for that period.
   • Select which statutory deductions (e.g. tax, NI) this deduction should interact with, in line with HMRC rules.

   • Set the usage / repetition option for this deduction (see section below).

     Repeat each period until a total amount is reached 

     

      

3. Save and Apply to Each Repayment Period
   • The deduction will now display on the payslip and will reduce the employee’s net pay for that period.
   • The “Loan Repayment” deduction will be applied to each payslip until the loan amount has been fully repaid.

For instructions on creating and managing deduction types, see:

• Adding & Amending Deduction Types
• Additions and Deductions Overview

Deduction Usage and Repetition Options

When creating a deduction type (including “Loan Repayment”) within the Employer tab, you can set default usage behaviour. These defaults will apply whenever the deduction is first added to a payslip, but can be adjusted per employee and per period.

Employer-Level Defaults (Deduction Type Setup)

Within the Employer > Deduction Types area, there are three main usage options when setting up a deduction type:

• Include in the period it’s added to only – the deduction is applied once in the period it is first used.
• Repeat until removed – the deduction continues on every subsequent payslip until you stop it.
• Repeat each period until a total amount is reached – the deduction repeats on each payslip until a specified total deduction amount has been taken.

These can be set as default settings for the deduction type, and will be applied automatically when you add that deduction to an employee’s payslip. However, you can change these settings on a per-payslip basis.

Employee-Level Settings (When Adding to Payslips)

When adding a loan repayment deduction to an employee’s payslip, you will see additional repetition options. You can choose to:

• Apply the deduction to that period only
• Repeat until removed
• Repeat up to a specific date
• Repeat until a total amount has been paid

If you choose to repeat up to a [date] or until [a total amount], the underlined fields will prompt you to enter the required information.

Once a total amount has been specified and the deduction added to the payslip:

• You can view the total deductions taken to date for that loan repayment type.
• You can also see the remaining balance to be deducted, based on the total amount you entered.

These settings are useful for:

• Fixed-term loans where repayments end on a specific date
• Loans with a defined total repayment amount
• Ongoing loan repayments that you plan to stop manually at a future point

Monitoring Outstanding Loan Balances

BrightPay Cloud does not have a dedicated “loan balance” feature, but you can monitor repayments using the deduction options and/or external records.

You should:

• Record the original loan amount when the “Staff Loan” addition is first applied.
• Track each “Loan Repayment” deduction applied to the employee’s payslips.
• Use the “repeat until a total amount has been paid” option to help you see total deductions to date and the remaining balance, based on the total you entered.
• Optionally, maintain a manual record (e.g. spreadsheet) of the loan and repayments for additional control.

You can also use BrightPay’s reporting features to monitor loan activity:

• Create a custom report to show all “Staff Loan” additions and “Loan Repayment” deductions for the relevant employee(s).
• Periodically reconcile the amounts to ensure the loan has been fully repaid.

For information on creating and viewing reports, see:

• Creating a New Report
• Viewing Reports
• Exporting Reports