Staff Loan Agreement South Africa
It is accepted that an employer does not seek to obtain the best possible benefit by providing a loan to a worker free of charge, without fees or without interest, as this is not to the advantage of the employer. Therefore, the transaction is not considered too foreign and therefore does not fall within the scope of the ACA. On the other hand, it is considered that an employer is trying to derive some kind of benefit from a transaction when it collects a royalty, royalty or interest (whether the interest rate is nominal or linked to Prime) for a loan granted to an employee. This amendment was then amended to the effect that the number of credit agreements was no longer an issue, but the threshold requirement of R500,000.00 remained in force In a communication published on 11 May 2016, the threshold for registering lenders at NIL (R0) was lowered. This new R0 threshold will come into force on 11 November 2016 and will mean that credit providers will no longer be able to hide behind the R500,000.00 threshold. An employer-employee loan subject to a nominal interest rate should not fall within the scope of the CBA, as the employer does not benefit from the loan; However, the NCR and the courts consider that any tax, royalty or interest levied on a transaction is subject to the NCA`s loan. 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. If the employee leaves the company (either voluntarily or for a valid reason) before a loan is paid, the employee remains legally obliged to repay the balance. It has been argued that loans granted in the context of an employment relationship are not concluded on comparable terms and should therefore not be regarded as a credit agreement within the meaning of the ACA. Employer-employee credit agreements generally provide that an employee pays nominal interest to the employer on the main debt for a certain period of time, and therefore: we now focus on the effect of the new threshold for companies, especially when an employer carries out different types of credit transactions with its employees.
It is therefore important that the employer asks for written permission to deduct money from a salary. . . .