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jppavone's avatar
jppavone
Experienced User
12 days ago

Novated Lease

Hi Everyone,

 

I have a query regarding a Novated Lease for one our employees. This started around December last year. We have looked at different options with how we show this for our employee but we settled on the following process to show this with our employees weekly payroll after having discussions with our accountants.

 

Pretax Salary Sacrifice (excluding GST) $527.23

 

We have shown this in MYOB as - 

Salary Salary Deduction (NLA) = -$527.23

Deduction

Deduction Name - Salary Sacrifice Deduction (NLA)

Linked Payable Account - 2-8843 Employee Novated Lease

ATO Reporting Category - Not Reportable

 

Deduct Salary Salary Sacrifice Deduction (NLA) from gross pay BEFORE calculating the selected tax.

PAYG Withholding is ticked.

 

 

Post Tax Employee Contribution (Including Non-Claimable GST) $30.52

 

Employee Contribution (NLA) = - $30.52

Deduction Name - Employee Contribution (NLA)

Linked Payable Account - 2-8843 Employee Novated Lease

ATO Reporting Category - Not Reportable

 

 

The employee has phoned up this week saying that not enough tax has been taken out for 2023-2024 and that his accountant has told him that he will owe money based on this if he lodges his tax return.

 

From our end we want to see if there is a way to correct this.

 

I have read some other posts on here about Novated Lease and I feel one thing that may need to be resolved is changing the ATO Reporting Category from Not Reportable to Salary Sacrifice - Other Employee Benefits because it has not shown on the employees Income Statement about this deduction for the financial year. If we make this change then we send an updated event to the ATO for 2023-2024.

 

I would appreciate any help about this and to see if there is a better way and how we fix up the issue with the employee not having enough tax taken out for the 2023-2024 Financial Year.

 

Thanks In Advance.

 

Kind Regards

 

John Paul

 

 

1 Reply

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  • Princess_R's avatar
    Princess_R
    MYOB Moderator
    10 days ago

    Hi jppavone,

     

    I see you're looking for info on handling a novated lease and adjusting the tax taken for your employee for the last financial year. I found this thread that might help you out with the novated lease part.

     

    For fixing the EOFY finalisation, you can undo the finalisation, change the ATO reporting category for the payroll categories you've set up, and send an update event before refinalising your EOFY. This will update the tax calculated on the employee's Income statement.

     

    Feel free to get in touch if you need more help.

     

    Cheers,

    Princess