---
title: "How to Set Up an Employee Wage Advance Repayment Deduction"
slug: "how-to-set-up-an-employee-wage-advance-repayment-deduction-third-pass"
description: "Set up an R365 Payroll post-tax deduction for employee loan repayment, with fixed paycheck amounts and automatic stopping when the balance is paid."
status: "new"
updated: 2026-10-14T17:00:49Z
published: 2026-10-14T17:00:49Z
canonical: "docs.restaurant365.com/how-to-set-up-an-employee-wage-advance-repayment-deduction-third-pass"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://docs.restaurant365.com/llms.txt
> Use this file to discover all available pages before exploring further.

# How to Set Up an Employee Wage Advance Repayment Deduction

When an employer advances money to an employee and needs to recover it through paycheck deductions, this is handled in R365 Payroll as a post-tax deduction on the employee record. Setting it up correctly ensures the deduction does not reduce the employee's taxable wages and stops automatically once the wage advance balance is repaid.

## **Symptoms**

- An employer loaned an employee money and wants to deduct a fixed amount per paycheck until repaid
- A user needs to set up a recurring deduction that does not affect federal or state taxable wages
- A user wants the deduction to stop automatically after a total repayment amount is reached

## **Steps to Resolve**

### Step 1 — Navigate to the Employee Record

1. Open the **Workforce** app.
2. Under **Employees**, click **Employees**.
3. Click the employee's row to open the employee record.

### Step 2 — Open the Deductions Section

1. Click the **Payroll** tab on the employee record.
2. Scroll until you find either a **Deductions** or **Benefits & Deduction** section:
  1. If you see a **Deductions** section, each **Company** the employee is associated with will be shown. Next to the correct **Company**, click the pencil icon.
  2. If you see a **Benefits & Deductions** section, click the **+ Add Deduction** button.

### Step 3 — Add the Loan Repayment Deduction

1. If the **Add Benefit or Deduction Type** field is not available, click the **+ New** button to reveal it.
2. In the **Add Benefit or Deduction Type** field, select or search for the post-tax deduction that you wish to use, such as **Loan Replacement** or **Other Post Tax Deduction**.

Do not use a garnishment type or a pre-tax deduction — loan repayments must be post-tax to avoid reducing taxable wages.

1. In the **Apply To** selection, choose the application that you’d like. Applications targeting **Payroll Payments** will only apply to **On-Cycle Pay Runs,** while applications targeting **Payments** will apply to both **On & Off-Cycle Pay Runs**.
2. In the **EE Deduction** field, enter the fixed dollar amount to deduct each paycheck (for example ‘300.00’).
3. In the **Effective Date** field, choose any date within the pay period that the deduction should begin applying to.
4. In the **End Deduction** section, select **Once total amount is paid**, then enter the total deduction amount in the **Total Amount Owed** field just below.
5. Determine if you’d like **Carry over unpaid balances** to be enabled and make your selection.
6. Click **Add Benefit** to save and apply to any open or future payments.

### Step 4 — Verify on the Next Payroll Run

1. Open the **Payroll** app.
2. Click **Payroll Hub**.
3. Open the current payroll batch.
4. Locate the employee and confirm the deduction appears in their pay details.
5. Confirm that the deduction is listed as a post-tax item so that taxable wages are unaffected.