Flare Novated Lease

Hi MelHand,  

Thanks for your question. I can see why you feel this way since the support experience currently isn't ideal. For a non-Flare lease, you’ll need to set it up manually using the breakdown from the lease provider: a pre-tax deduction, a post-tax employee contribution, and a liability account.

The exact amounts and tax settings depend on the agreement, so please check these with the provider or your accountant. This guide may help:

https://www.myob.com/au/support/myob-business/payroll/novated-car-leasing

Regards,
Genreve

Thank you for responding, but this does not help at all.

"The exact amounts and tax settings depend on the agreement, so please check these with the provider or your accountant. This guide may help" - I had hoped this link was going to take me to a guide about manually setting up a lease, since that is what I was asking for. But the link you sent is exactly at the heart of my issue - MYOB pointing me straight to Flare as the solution.

And it is also the very substance of my issue - step 3:

"You'll then be guided through a one-time novated lease setup in MYOB."

I have emailed my salesperson 4 times, the generic email address 4 times, and still getting the run-around and no help with the lease set up in MYOB.

It has been 3 weeks since the lease was set up.

If you are able to provide me with steps to manually set up the lease, then please do that. 

Hi MelHand​ 

I have the same problem now. Have you sorted it? I called MYOB today and gave provide me instructions for a manual setup:

Option 2: Manual setup for a non-Flare provider

1. Obtain the lease schedule

Ask the lease provider for:

• Pre-tax amount per pay
• Post-tax employee contribution/ECM amount, if applicable
• Pay frequency
• Any luxury car charge or additional amount

The pre-tax and post-tax amounts must match the employee’s pay frequency.

2. Create a liability account

AccountRight:

1. Go to Accounts command centre.
2. Select Accounts List.
3. Select New.
4. Create an Other Current Liability account.
5. Name it something like Novated Lease Payable.
6. Save the account.

This account will hold the deductions until the financier is paid.

3. Create the pre-tax deduction

1. Go to Payroll command centre.
2. Select Payroll Categories.
3. Select Deductions.
4. Select New.
5. Name it Novated Lease – Pre-tax.
6. Set the calculation to Fixed amount per pay or User-entered amount.
7. Link it to the Novated Lease Payable liability account.
8. Set the ATO reporting category to Salary sacrifice – other employee benefits.
9. Open the Exemptions tab and select PAYG Withholding.
10. Save the deduction.

4. Create the post-tax ECM deduction

Only create this if the provider’s schedule includes a post-tax employee contribution.

1. Select Deductions > New.
2. Name it Novated Lease – Employee Contribution (ECM).
3. Set the calculation to Fixed amount per pay or User-entered amount.
4. Link it to the same liability account.
5. Set the ATO reporting category to Not reportable.
6. Do not select PAYG Withholding as an exemption.
7. Save the deduction.

5. Add the deductions to the employee

1. Go to Card File > Cards List.
2. Select Employees.
3. Open the employee.
4. Go to Payroll Details.
5. Open Deductions or Standard Pay.
6. Add the pre-tax deduction.
7. Add the post-tax ECM deduction, if applicable.
8. Enter the amounts provided by the lease provider.
9. Confirm the items are set up under Deductions, not Wages or Allowances.

6. Test the payroll

Run a test pay and confirm:

• The pre-tax amount reduces taxable income and PAYG withholding.
• The post-tax ECM amount reduces net pay.
• The pre-tax amount reports as Salary sacrifice – other employee benefits.
• The post-tax amount is not reported as salary sacrifice.
• Both amounts accumulate in the novated lease liability account.

7. Pay the financier

When paying the lease provider, record the payment against the Novated Lease Payable liability account so the deductions are cleared.