A novated lease is a motor vehicle lease that has been novated, that is, the obligations in the contract have been transferred from one party to another which means that your employer is a party to your purchasing agreement, and allows you to pay for your vehicle as part of your salary package by paying your car payments for you out of your pre-tax earnings.
To Setup Novated Lease In Wagemaster
Setup a Pre-Tax Deduction Allowance by navigating to Setup > Allowances.
- Click Add and the Allowances wizard will appear.
- Select Next at the Welcome to the Allowance Wizard screen.
- Choose Standard Allowance.
- Click Next.
- Complete the Allowance Details.
- Description: Enter a description of the allowance.
- Type: Select it as a deduction.
- Amount: Enter the allowance amount.
- Minimum: Leave as $0.
- Maximum: Leave as $0.
- Frequency: Select how this allowance is paid (eg each pay period, hourly, each shift, etc).
- Taxed: Check this box to be taxed.
- Include in SG Gross: If you want this deduction to reduce the employee's SG gross (superable earnings), tick the Include in SG Gross box.
- Include in Super Calculation: Check if the allowances super are to be paid on this amount.
Be careful ticking the Include in Super Calculations and Include in SG Gross boxes, in the case of a deduction, as it will reduce an employee’s superannuation and superable earnings.
- This deduction setup specifically reduces their taxable or gross income. This is a salary sacrifice and often a part of salary packages. On the payslip:
Gross (Taxable) pay will reduce.
Tax will reduce.
Net pay will reduce.
- At the ATO Payment Summary screen, make your selection. We recommend you check with your accountant if the allowances need to be shown on the following:
- The ATO Payment Summary.
- Reported in STP.
- ATO Allowance type (i.e.: car, transport, meals, travel).
- If none of the above, leave both options unchecked.
- Leave as default because you are using Agrimaster as the accounting system - the allowance account Code can be set in Agrimaster. Click Next.
- Select Finish to confirm the new allowance created.
- The Allowance screen will list the newly created allowance. Click Close to complete the process.
- Click close to save.
- Attach this allowance to the employee record.
- Your payslip will look as below.
- In Agrimaster, before importing the transaction you will need to complete payroll configuration in Agrimaster for newly created allowances to ensure these transactions are coded correctly in your cashbook.
- Your imported transaction in Agrimaster will look as below.
- For making the motor vehicle payment, you will need to create a manual transaction with the same Codes which will look as below.