Payment Type

Definition

Differentiate between loan payments according to the following criteria:

whether it is a case of a payment to the borrower or a repayment to the employer

whether the payment is made directly by check or bank transfer or is cleared with the employee's remuneration during the payroll run

Use

We recommend that you use the payment types provided by SAP. However, if you require your own payment types, you can set these up in Payroll Customizing under Loans → Master Data → Customer Payment Types

Payment type	Use	Comment/Example
Outgoing payment to third-party	You do not want to pay out the loan to the employee, you want pay it to a third person instead.	An employee receives a building loan to build a house. You do not pay the loan to the employee, but to the contractor who builds the house.
Loan payment (payroll)	You want to pay the employee the total approved amount of the loan or part of this together with his/her pay.
Loan payment (external)	You want to pay the employee the total approved amount of the loan or part of this by check or bank transfer.
Loan remission	An employee cannot repay his/her loan or you want to release him/her from the remaining debt.	You can only close a loan in the system when the remaining loan amount has either been repaid by the borrower or remitted by the lender.
Fees	You want to demand fees from your employee for granting the loan.
Total repayment	The employee repays the total outstanding amount of the loan by check or bank transfer.
Special repayment (payroll)	The employee makes an unscheduled repayment that should be withheld from his/her pay.
Special repayment (external)	The employee makes an unscheduled repayment by check or bank transfer.
Loan balance transfer	You want to transfer company loans from a legacy system.	You can also use the payment type Loan payment (external) for transferring loans from legacy systems.

This graphic is explained in the accompanying text.

The Special Repayment (External) and Complete Repayment payment types can both be used for a direct repayment by check or bank transfer. These payment types have different types of interest calculation:

In the case of special repayment (external), the day you specify as the payment date is not taken into consideration in interest calculation.

In the case of total repayment , this day is taken into consideration in interest calculation.

If you want to enter a repayment for an employee, that leaves the company or changes company code, use the Total repayment payment type. This guarantees that interest is calculated for the loan even for the last day that the employee works in the company or is assigned to the old company code.

This graphic is explained in the accompanying text.

The employee Elena Lopez leaves your company on April 30. She was granted a company loan. You want to enter an external repayment for this loan on April 30. If you enter the repayment as a special repayment (external) with the payment date of April 30th, no more interest is calculated for the loan for this day. If you enter the payment as a complete repayment with the payment date as April 30, interest will still accrue for this day. As Elena Lopez is no longer an employee in your company on May 01, you cannot enter the payment as a special repayment (external) with the payment date as May 01, so that interest can still be calculated for April 30.