Recognition of a loan to staff

Companies may, under certain conditions, grant loans to their employees. For best accountancy training Best school of accountancy In Pakistan.

Rules governing the lending of money to employees

An enterprise is allowed to lend money to its employees but this practice must remain exceptional and be justified by a social reason. Moreover, it is strongly framed. A loan contract must be drawn up if the loan is granted without interest and is greater than EUR 1 500 or if the loan is granted at an interest rate higher than the legal rate. In all cases, it is widely advisable to establish a convention even if this is not mandatory.

It must contain various mandatory information, in particular:

The interest rate, the amount of the due date, the method of payment and the payment dates (an amortization table may be inserted for this purpose),

The fate of the loan if the employee's employment contract were to be broken.

It is, in practice, widely discouraged to deduct loan repayments from net wages.

Attention, the employee who is the beneficiary of the loan must declare it on a special form (n ° 2062) when the amount is equal to or greater than 760 Euros. If the amount of the loan is less than this amount and the employer has made several loans of this kind, it is he who is obliged to make this declaration if the total of the loans granted exceeds the sum of 760 Euros.

When the loan is fully repayable and complies with certain other rules, it is exempt from payroll taxes .

Lastly, different rules apply in the case of loans granted to staff representing investments which have paid off the participation of employers in the construction effort. The loan must be:

Reduced interest rate (less than or equal to the A-book rate in force on 31 December of the year preceding the issue of the loan offer or 1% if the A-book rate falls below 1%);

For a particular category of households (whose resources do not exceed a certain ceiling);

Refundable for a period not exceeding 30 years;

 To finance the construction of a dwelling assigned to the employee's main residence or to his / her limited family circle provided that the dwelling meets specific energy performance requirements.