Employee Loan EMI Calculator
Work out the monthly instalment on a staff loan or salary advance, and check it against the statutory cap — total deductions from wages cannot exceed 50% in any wage period, however much the employee agrees to.
Free · No sign-up · Nothing leaves your browser · Figures reviewed 22 September 2026
Your details
Leave at 0 for an interest-free loan.
Months.
Used to test the instalment against the 50% deduction cap. Leave blank to skip that check.
PF, insurance, professional tax, any other recovery already running.
Monthly instalment
₹8,333
Interest-free, so the instalment is simply the loan spread over the term.
The loan
- Amount
- ₹2,00,000
- Rate
- Interest-free
- Term
- 24 months
- Monthly instalment
- ₹8,333
- Total repaid
- ₹2,00,000
- Interest
- ₹0
Against the deduction cap
- Monthly wages
- ₹45,000
- Existing deductions
- ₹5,400
- With this instalment30.5% of wages
- ₹13,733
- Statutory cap50% of wages
- ₹22,500
- Headroom left
- ₹8,767
Section 18(2) of the Code on Wages caps total deductions from wages at 50% in any wage period, and an employer loan recovery counts towards it.
An interest-free or concessional loan from an employer is a taxable perquisite where the outstanding balance exceeds ₹20,000, valued at the State Bank of India's rate for that kind of loan. Medical loans for specified illnesses are excluded.
The recovery must stop at the 50% cap even when the employee agrees to more — consent does not lift a statutory ceiling.
This is an estimate for planning, not tax or legal advice. Statutory rates and thresholds are date-effective and change by notification — confirm against the current one before you run payroll or file.
Employer loans are usually interest-free or concessional, which makes the instalment easy and the compliance question harder. Two things bite: the 50% cap on total deductions from wages, and the perquisite value of the concession.
This calculator does both — the instalment, and how much room is left under the cap once existing deductions are counted.
Frequently asked questions
- Is an interest-free loan from an employer taxable?
- Yes, as a perquisite, where the outstanding balance exceeds ₹20,000. It is valued using the State Bank of India's rate for that kind of loan as at the start of the year. Medical loans for specified illnesses are excluded.
- How much can an employer deduct from salary for a loan?
- Total deductions from wages — including PF, insurance, professional tax and any loan recovery — cannot exceed 50% of wages in any wage period, under section 18(2) of the Code on Wages. The employee's consent does not lift that cap.
- What happens to an outstanding loan when someone resigns?
- The balance is normally recovered from the final settlement, but still subject to the 50% cap on that wage period. Anything beyond it has to be recovered separately rather than withheld from wages.
About this tool
Built by the ViniOffice team. Figures and rules last reviewed 22 September 2026 against the statutory reference this team maintains. Indian statutory rates are date-effective and change by notification — confirm against the current one before running payroll or filing. This is an estimate for planning, not tax or legal advice. Statutory rates and thresholds are date-effective and change by notification — confirm against the current one before you run payroll or file.
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