Sample Loan Agreement To Employee

It is therefore important that the employer must obtain written permission to deduct money from a salary. In the absence of a written agreement, you can be sued for damages if you with wither the payment of an employee`s salary. You should indicate the reason for the deduction, for example. B a cash credit or an advance on a salary or a purchase of shares by the company, etc. However, an employee may have personal reasons for applying for a loan from the company (in case of unforeseen expenses, emergencies or difficulties) and is not obliged to disclose the reasons in detail. The short answer is yes. In our aforementioned employee credit agreement we see the reason for the loan that can be: unlike a debt certificate for which the borrower controls the repayments, the employer can control the repayments of a credit to the staff. The employer would therefore be well advised not to lend beyond the weekly or monthly salary. A more extensive installment credit agreement should be established for long-term loans or large loans that can be maintained beyond the duration of employment. The credit or debt contract below also provides that the full amount is deducted when the worker terminates.

However, this can be seen as an acceleration of debt repayment, i.e. a deduction of an amount greater than the agreed weekly/monthly amount, which may be illegal in your jurisdiction! Obtaining loans to employees to obtain shares in a business is considered a benefit to the worker and may be taxable. You should consult your financial advisor or business controller on how best to structure this type of credit agreement. For legal deductions such as .B.