Salary Packaged Mortgage Payments

1

I have a property loan represented as a liability account in Manager. A fortnightly payment is made directly to the bank against this loan by my salary packaging company.

I’d like to reflect that transaction in Manager so the balance of the loan account in Manager matches the loan balance with the bank.

With no bank account configured in Manager, I understand using payments/receipts is not an option (please correct me if that’s incorrect).

Is a journal entry therefore one way to handle these transactions in Manager? If so, which accounts should be debited and credited?

I currently record only net pay in Manager (i.e. the net payment transferred from my employer to my bank account) and have no additional salary sacrifice accounts setup in Manager. Maybe this is needed?

I use Manager for personal records keeping/budgeting/analysis. I’m not an accountant and don’t have access to one for setup advice.

2

@michhes_au, those two statements are direct contradictions of one another. You need to more clearly explain the exact circumstances to get an answer.

In simple terms, you cannot do this. Your approach ignores actual income, yet records a liability reduction you use that income to accomplish.

3

Why?
In practice almost all businesses I know use a working ’bank’ account.

So to accurately represent what you are doing in your business a bank account in Manager is required.

4

Apologies, I worded that poorly. I do have regular bank accounts configured in Manager. I don’t have a bank account representing the loan, only the liability account.

5

Hi @michhes_au,

Who took a mortgage loan, the employee or the company?

I’m asking because there seems to be a mix-up here:

  • If the mortgage loan is taken by the company, why would it appear on the employee payslip?
  • If the mortgage loan is taken by the employee, why would the loan account be on the company’s Balance Sheet?

Either way is wrong.

If the mortgage is deducted from the employee and paid directly to his bank, then a separate Payslip Item should be setup for this which will go to the Profit & Loss as part of the staffing expenses.

6

The loan is mine for my family home. It’s not a novated lease or similar. Repayments are made to the bank by the salary packing provider from my gross salary, reducing the balance of the loan.

I don’t currently represent my gross salary in Manager, only the net payments (deposits into my bank account) but it sounds like I should, breaking down the components of net income and salary packing (and superannuation, etc)?

7

Your business doesn’t care what you do with your salary - pay your mortgage, buy groceries, go out to a restaurant

You can’t mix your personal finances and your business finances in this way

8

I think you’ll find the program is being used soley for personal use, not a business

9

I missed that, sorry

You should record the receipt of your net pay using two lines
The first line has the net pay plus the motgage payment posted to salary
The second line records the mortgage payment to the liability account using a negative value

Are there other deductions on your payslip - for income tax, for example?

10

That makes sense and I think I’ve got that working and balancing in Manager now.

The payslip looks like this and does include additional pre- and post-tax deductions:

Gross salary
Less PAYG Tax
Less pre-tax deductions: mortgage repayment and other items
Less post-tax deductions: novated lease
Net
Employer superannuation

I’ve currently split up the receipt as follows in a test business (ignore the control account):

image

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