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