How loan installments and interest are taken from pay

Each pay run takes an installment of every approved loan, plus interest on what is still owed. To skip or change one month's installment, enter a loan override for that month before the pay run.

HR & payroll Loans and advances
3 min read
Updated October 20, 2026

For Payroll officer Accountant Employee

The idea

You do nothing to repay a loan. At each pay run, for every Approved loan of the employee whose issue date has passed and that still has something owing, Penahak takes:

the installment: the approved amount divided by the number of installments (rounded up), but never more than what is still owed; and
the interest, if the loan type has interest: simple interest on what is still owed, for each day since the last installment (or since the issue date for the first one), at the yearly rate, rounded to whole rupees.

Both appear on the payslip (Deduction lines for the loan and its Interest) and are added to Paid in principal and Paid in interest on the loan.

Skip or change one month

Open Advance loan issue and its Advance loan override tab. Press Add, choose the employee and the Period, and for each loan enter the Amount to take that month.

An amount lower than the installment takes less this month; the rest stays owed.
An amount of 0 skips the month and charges no interest for it.
An amount above what is owed is cut down to what is owed.

Do this before the pay run. An override is used once, by the pay run of its period; after that it shows as Adjusted.

Worked example: a 20,000 advance in 3 installments, with one month skipped

The approved amount is 20,000 in 3 installments, with no interest. The installment is 20,000 ÷ 3 = 6,666.67, rounded up to 6,667.

Pay run	What is entered or happens	Taken from the payslip	Paid in principal	Still owed
1	Nothing: the usual installment	6,667	6,667	13,333
2	Before the run, the payroll officer adds an Advance loan override for this period with Amount 0	Nothing: the payslip has no loan line	6,667	13,333
3	Nothing: the usual installment	6,667	13,334	6,666
4	Nothing: 6,667 is more than what is owed, so only what is left is taken	6,666	20,000	0

The override is used once, by the pay run of its period, and then shows as Adjusted. The skipped month pushes the end of the loan back by one month.

Worked example: a loan with interest

An employee has one Staff loan: approved amount 60,000, 12 installments, interest 12% a year. The installment is 60,000 ÷ 12 = 5,000. Suppose the first Payroll date is 30 days after the issue date. Penahak counts both the first and the last day, so it uses 31 days.

Pay run	Still owed before it	Interest	Installment	Taken in all
First	60,000	60,000 × 12% × 31 ÷ 365 = 611.51, rounded to 612	5,000	5,612
Second, with a Payroll date 30 days after the first	55,000	55,000 × 12% × 31 ÷ 365 = 560.55, rounded to 561	5,000	5,561

The interest is worked on what is still owed, so it falls a little each month, and it is rounded to whole rupees. Both amounts are added to Paid in interest on the loan; the 5,000 installments are added to Paid in principal.

When the pay run is deleted

Deleting a draft payslip puts the installment back: the loan's Paid in principal, Paid in interest and number of installments are reduced again, and any override is free to be used (Run the month's payroll).