GST and income tax treatment of payroll deductions received as novated lease administrator

 Author: NikkiATO(Community Moderator)Community Moderator

26 Feb 2026

Hi @PRW2026,

This depends on your legal and contractual arrangements (for example, whether you are acting as a principal or an agent).

Section 6‑5 includes ordinary income you derive, but there’s no ruling that confirms whether the gross payroll deductions you receive in this administrator role are (or are not) your assessable income.

At G1 (total sales), you report the total of the sales you make (taxable, GST‑free and input‑taxed) for the period. Whether amounts you collect and pass on are your sales turns on whether you’re making supplies as principal or merely acting as an agent. GSTR 2000/37 explains how GST applies in agency relationships (including when an entity receives money and pays suppliers on behalf of a principal). Because we can’t determine agency vs principal (and our novated‑lease page doesn’t address administrator entities), we can’t confirm that only your administration fee belongs at G1.

Whether the pass‑through amounts should be shown as a liability (similar to trust/client monies) is an accounting and legal characterisation that depends on your contracts and whether you hold the funds for the employer/employee or in your own right. If you need certainty, it would be best to consider applying for a private ruling.

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