Novated Lease

 

If you are a full-time employee and looking to finance a new vehicle, then a novated lease could be for you. A novated lease can be an extremely tax effective way to finance and maintain your vehicle. It allows you to package your vehicle lease and associated running expenses into one monthly payment which is deducted from your salary, primarily pre-tax. This can result in a significant reduction in your income tax.

 

It consists of a three way agreement between the employer, an employee and a finance company. The employer agrees to take on the responsibilities of the lease payments on behalf of the employee and deduct the lease costs from their salary. We factor in budgets for your running expenses such as fuel, servicing, tyres, comprehensive insurance, registration, CTP and roadside assistance. These expenses are incorporated into the lease payment allowing you to receive huge tax savings on not only the finance lease, but your running expenses as well.

 

As well as being a tax effective way to finance a vehicle, it’s also a convenient and flexible way to manage your vehicle expenses. By including monthly budgets for your vehicle expenses, you can reduce the impact of annualised costs such as registration renewal and servicing costs. Your monthly budgets will accrue in your expense account so when it comes time to service the vehicle, change tyres or renew your registration, the money will be there to pay for it.

 

Employee benefits:

  • Significant income tax savings
  • No GST on purchase price of the vehicle (up to the Luxury car Limit)
  • Fleet discounts on new vehicle purchase price
  • Conveniently packaged
  • GST savings on running expenses
  • New or used vehicles
  • Flexibility on vehicle choice

 

Employer benefits:

  • Great staff retention tool
  • Employee incentive
  • Increase their employee’s disposable income
  • Alleviate FBT Liability

 

For more information on a novated lease package that will suit you, fill out your details to the right and one our novated leasing specialists will be in touch to help.

 

Related Articles:

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Fringe Benefits Tax (FBT) and Novated Leasing

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