How do I enter a payment in Payroll if an employee makes a loan payment directly?

Adjust the YTD Deduction amount for the loan repayment:

From the Payroll Tools menu, select Options.
Select the Audit setup activity check box and click OK.
From the Payroll Setup menu, select Employees.
Select the employee and click Deducts.
For the loan deduction, add the amount of the employees payment to the YTD Ded amount.
Click Accept line, Accept table, Save and Close.

Enter the deposit in Cash Management and select the loan liability account for the Credit account. For more information, see article 92691 DocLink: How to enter bank transactions in Cash Management