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The figure of the loan made by the company to the employees is quite recurrent and frequent, in the business environment. We are going to address its treatment, in this work, from the accounting point of view.

Like any loan operation, it must be documented in its corresponding loan contract, which must include among its essential elements:

  • Full identification of the lender: the company.
  • Complete identification of the borrower: the worker.
  • Object of the contract: loan of money.
  • Quantity and return period.
  • Form of return: partial compensation of salary, deliveries by the worker, etc ...
  • Interest agreed by the parties.
  • Etc…

Let's suppose that on 07-01-2020 a loan contract is formalized between the worker Dª Úrsula XXX, for an amount of 1,000 euros. The repayment term of said loan is divided into 10 monthly installments of 110 euros (100 euros of loan repayment and 10 euros of interest).

The form of repayment of this loan is carried out in two ways: discount in monthly payroll, bank transfers made by this worker, and / or cash deliveries made to the department of
administration. The form of return is at the convenience of the worker.

At the time of granting the loan, the company will record the following accounting entry:

DISPOSAL OF THE LOAN Should To have
(544) Short-term loans to staff 1.000  
(572) Banks, checking account   1.000

 

After the first month, the payroll of this worker is accrued (1,500 euros gross - 150 euros of personal income tax - 105 euros of Social Security). The Social Security of the company amounts to 475 euros. At this time, the worker has the amount of the first monthly payment deducted from her payroll.

The payment scheme for your payroll would be as follows:

  • Gross salary: € 1,500.
  • Social security worker: € 105.
  • IFPF worker: € 150.
  • Loan discount: € 110 (€ 100 of capital + € 10 of interest).
  • Net salary to be received by the worker: € 1,135.

The accounting record of these operations would be as follows: 

PAYROLL AND DISCOUNT
FIRST LOAN FEE
Should To have
(640) Wages and salaries 1.500  
(642) Social Security in charge of the company 475  
(476) Creditors Social Security Organizations   580
(475) H.P. Acreed. For withholdings made   150
(544) Short-term loans to staff   100
(769) Other financial income   10
(465) Remunerations pending payment   1.135
or (572) Banks, checking account    

Suppose that, in the following month, the same payroll is accrued, but the worker prefers to be paid the full salary of her payroll, to proceed to pay the monthly payment of her loan the following week, by bank transfer to the account of the company.

 

PAYROLL ACCRUAL + FULL CHARGE Should To have
(640) Wages and salaries 1.500  
(642) Social Security in charge of the company 475  
(476) Creditors Social Security Organizations   580
(475) H.P. Acreed. For withholdings made   150
(465) Remunerations pending payment   1.245
or (572) Banks, checking account    

 

TRANSF. BANK. FOR THE MONTHLY LOAN Should To have
(572) Banks, checking account 110  
(544) Short-term loans to staff   100
(769) Other financial income   10

 

And so on we would proceed to complete the return of the amount of the borrowed capital, and the accrued interest, in the 10 months that this operation is going to be extended over time.

From the fiscal point of view, we can see how the loan has accrued interest in favor of the company (financial income), which will be integrated into the financial result, making up the total of the corporate income tax base for the borrowing entity.

It is important to note that this operation could be considered as carried out between related parties, given the existing employment relationship between the lender and the borrower. In this case, it is important to note that the type of remuneration, in these cases, should never be less than the legal interest of the money.

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