Novated Leasing for Employees
What is a Novated Lease?A novated lease can be an effective form of tax planning because it allows you to lease the car of your choice and all the lease and running costs are paid from your pre-tax salary. You also pay your car running costs excluding GST.
You lease the vehicle from the financier, and then transfer the obligations of the lease to your employer. Your employer pays an amount each month to Fleetcare on your behalf to cover the lease instalments and all operating costs associated with the running of your vehicle. Your employer collects this money back from you through salary sacrificing - by retaining the monthly amount from your salary. In return, you have exclusive access to your vehicle for unlimited private use. Why are Novated Leases tax effective?Usually when you lease a vehicle personally, you would need to pay for your lease instalments and running costs from your disposable income - in other words, from the money that's left in your pocket after PAYG tax has been deducted from your salary. The attractive feature of Novated Leases is that your employer retains payment for your lease from your pre-tax salary, or a combination of pre-tax and post-tax salary. This means that you are paying for your vehicle without paying PAYG tax on your earnings first. PLUS, your running costs are charged to you without GST which instantly gives you a 10% saving. The only offset to this is a Fringe Benefits Tax charge, but because of the concessional nature of FBT on vehicles, the FBT charge is often outweighed by the benefits of the PAYG and GST savings. | What's included with a Fleetcare Novated Lease?Your service will include the following:
Novated leases are most suitable if ...
How can I apply for a Novated Lease?
2. Take the Salary Package Schedule to your accountant or financial advisor for financial advice. 3. Sign and return the Fleetcare Salary Package Schedule and Vehicle Management Agreement. 4. Fleetcare will then seek approval from your employer and the financier to proceed. |
A Novated Lease is a three-way agreement between you, your employer and a financier. 
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