It is therefore important that the employer obtain written authorization to deduct money from a salary. Without a written agreement, you can be sued for damages if you do not pay an employee. Your labor laws can also limit deductions to a percentage of gross earnings, so check your local laws before extending credits. The Usury Act also determines the amount of interest that can be charged. For more information on interest rates and interest-free loans, see our instructions on notes to order. 4. The worker also agrees that the entire outstanding amount be deducted from the worker`s last salary in the event of termination or termination of the employer`s or company`s employment relationship. A simple loan contract describes the amount borrowed, whether interest is due and what should happen if the money is not repaid. For more information, check out our article on the differences between the three most common credit forms and choose what`s right for you. The loan contract provided here is specially designed for staff. You`ll find a lot of other loan deals on our Celebrityory Notes page. Loans to employees to acquire a stake in a business are considered a benefit to the worker and may be taxable.
You should consult your financial advisor or business controller to find out how best to structure this type of credit contract. The loan agreement should clearly state how the money is repaid and what happens when the borrower is unable to repay. In general, a loan agreement is more formal and less flexible than a change of sola or an IOU. This agreement is generally used for more complex payment agreements and often provides the lender with increased protection, for example. B borrower representatives, guarantees and borrower alliances. In addition, a lender can normally speed up the credit in the event of a default, which means that the lender can make the total amount of the loan, plus interest due and immediately, if the borrower misses a payment or goes bankrupt. An employer does not wish to participate in the budgeting of its employees or manage its finances, so there should be a staff credit policy and loans must be renewed responsibly by the employer, for example. B: they must indicate the reason for the deduction, such as. B a cash loan or interim payments for a salary or share purchases of the company, etc.