Check-Off Loan Deduction Calculator
Calculate how much additional loan repayment an employee can accommodate under an employer's deduction limit — after accounting for the deductions already coming off their salary.
How this is calculated
The deduction ceiling is a share of net salary, and available room is what remains under it:
ceiling = salary × ratio · available = max(0, ceiling − existing)
The ratio is fully editable because it is set per employer MOU and varies by employer — change it to your actual agreement.
What is check-off lending?
Check-off lending collects repayments straight from payroll under an employer agreement. Payroll deduction can reduce repayment risk because installments are collected directly through salary, but it does not eliminate credit or employment-related risk — which is why deduction-capacity discipline (not over-committing the salary) matters so much.
What is a maximum deduction ratio?
It is the employer’s cap on total salary deductions, protecting employees from being stretched too thin. This tool never lets available room fall below zero, and flags “no room remaining” when existing deductions already hit the cap.
FAQ
What is check-off (payroll-deduction) lending?
Lending repaid by deducting installments directly from a borrower's salary at source, under an agreement (MOU) with their employer. Because the installment is collected through payroll, it can reduce repayment risk — but it does not eliminate credit or employment-related risk.
What is a typical employer deduction limit?
It varies by employer MOU — often around one-third of net salary, but it can be higher or lower. There is no single universal figure, so always set the limit in this tool to the specific agreement you are lending under.
How is available capacity calculated?
Maximum total deductions = net salary × limit%. Available loan installment = maximum total − existing deductions (floored at zero). Whatever is left under the limit is the largest new installment the employee can take on.
Does payroll deduction remove risk?
No. Collecting the installment directly through salary reduces repayment risk, but it does not remove it — the employee may leave or lose the job, salary may fall, or other deductions may take priority. Treat check-off as a risk-reducer, not a guarantee.
What counts as existing deductions?
Everything already coming off the employee's net salary through payroll: other salary loans, SACCO contributions, insurance, union dues and similar committed deductions. Enter the total already deducted so the available room reflects what is genuinely left under the limit.
Why is the deduction limit editable?
Because it is set per employer MOU and differs between agreements. Always change it to match the specific MOU rather than relying on the default.
What does 'no room remaining' mean?
Existing deductions already reach or exceed the limit, so no further deduction is available. It is a valid, meaningful result — shown as a warning, not an error.
Run payroll-deduction lending on Ustawi.
Ustawi’s Check-off Salary Lending app manages employer MOUs, deduction limits and payroll schedules end to end, while Core Lending carries each loan through origination, disbursement and servicing — so deduction capacity is respected on every loan.
