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How do I setup a Novated Lease?

Author Samantha Haigh@Microkeeper
Category Payroll
Last Modified 15/05/2024

A novated lease is a three-way agreement between an employer, employee and a novated lease provider where the employer takes on the obligation for repayments under the lease and a corresponding deduction is made from the employee salary
 
To setup a Novated Lease go to Settings > Payroll Rules > Deduction Rules.
Then Select "Create New Rule". 

Pre Tax Setup

  1. Select "Expense". 
  2. In the Title, title the rule  "Pre-Tax Novated Lease".
  3. Select the Employee this applies to. 
  4. Select Fixed
  5. Enter the weekly amount to be deducted under "Value"
  6. Select the Correct FBT Classification.
  7. Click Add New Rule. 

Post Tax Setup:

  1. Select "Deduction". 
  2. In the Title, title the rule  "Post-Tax Novated Lease".
  3. Select the Employee this applies to. 
  4. Select Fixed.
  5. Enter the weekly amount to be deducted under "Value"
  6. Select "NA" as the Classification. 
  7. Click Add New Rule. 

This will now deduct this amount automatically in the Payrun.