No provision of Georgia law prohibits the deduction from an employee's wages of payments on an advance or loan from the employer. However, as with any other payroll deduction (except for taxes, court-ordered deductions for child support or garnishment, or state-owed costs), the employer should obtain a signed authorization from the employee that includes a clear statement of the amount, date, and repayment terms of the loan specifying the amount of the deduction to be taken.
If an advance or loan is large (e.g., tuition expenses), it is advisable to obtain a signed promissory note acknowledging receipt of the funds, the amount of the loan, and the person's obligation to repay in addition to the written withholding authorization. Handling such loans with a promissory note will put the employer in a better position to pursue repayment if the employee terminates before completing repayment.
Last reviewed on March 31, 2016.