Boost your employee benefits and attract top talent
Can you afford to lose 8% of your workforce?
According to the latest ABS data, that is the proportion of Australia’s workforce that changed jobs last year. In highly mobile industries like healthcare, construction and accommodation, the proportion was even higher.
It’s a job seeker’s market. As an employer, you are under pressure to sweeten the deal or risk losing 8% (or more) of your top talent to competitors. By offering a novated lease program, you can do exactly that without bearing the cost of more employee benefits.
This guide breaks down the novated lease benefits for employers to help you build a benefits package that attracts, retains and rewards top talent.
Why should employers offer novated leases?
Attract, retain and reward great employees
Novated leasing helps your business stand out as an employer of choice. This attractive salary packaging perk allows employees to access potential tax savings, reduce the cost of running and getting into their next car, and maximise their take-home pay.
Improve employee satisfaction and loyalty
Novated leasing isn’t just about perks. It’s also a way to show employees you care about their financial well-being. Offering salary packaging for cars can boost morale and encourage long-term loyalty, reducing staff turnover costs.
Given that replacing an employee costs between 40% and 200% of their salary (based on seniority), every person you retain is good for business.
Gallup: Employee retention
Save on payroll costs
One of the novated lease benefits for employers is the potential to lower payroll costs by reducing employees’ gross salaries.
By enabling employees to salary-package a portion of their income, you might be able to reduce payroll tax obligations and insurance costs without impacting your company’s bottom line.
It’s cost-free and hassle-free
When you partner with a reliable provider like Fleetcare, implementing a novated lease program is simple and doesn’t cost your business a cent. There are no setup fees, ongoing management charges, or administrative burdens. Fleetcare handles the heavy lifting for you.
Read more: Debunking novated leasing myths.
An employers’ perspective: How do novated leases work?
A novated lease allows employees to finance their next new, used or existing car and its running costs. Here’s how it works:
Employee salary sacrifice
Your employee agrees to sacrifice some of their before-tax salary to cover the costs of a vehicle lease, including expenses like fuel or charging, servicing, insurance, rego and tyres. Accessing their pre-tax salary often means they pay less income tax and take home more each pay.
If they decide to take out a novated lease on an eligible electric vehicle (EV) or plug-in hybrid (PHEV), all payments are made before-tax thanks to the Federal Government’s Electric Car discount. Plus, there are additional government incentives available for EVs and PHEVs (until 1 April 2025), which make these cars even more affordable.
Your role
As the employer, your role is straightforward:
- Deduct the agreed amount from the employee’s salary
- Forward payments to the leasing provider
A big benefit of a novated lease for the employer is that you aren’t responsible for the lease itself. If your employee leaves, their obligation to pay for the lease moves with them.
Leasing provider’s role
Choosing the right novated lease provider makes all the difference. Reliable providers make the entire process easy while giving your employees access to a better range of vehicles and all possible tax advantages.
Fleetcare works with employees to:
- Help them select the car of their choice
- Negotiate competitive pricing through dealer networks
- Manage the ongoing administration of the lease, including expenses and GST savings
As one of Australia’s leading novated lease providers, our solutions and services go beyond what other providers offer. Our national dealer network, two decades of experience, and advanced FBT solutions ensure both employees and employers benefit from a novated lease.
See our novated lease showroom and EV options.
Cost savings for employees
Novated leasing could offer employees great financial advantages:
- Save GST on the car’s purchase price and some running costs
- Potentially reduce taxable income, leading to lower income tax
- Access to Fleet discount for new vehicles
Visit our Novated Leasing Employer Solutions page for a detailed breakdown of how much employees can save.
Novated lease vs. traditional car financing
Unlike traditional finance methods like loans or hire-purchase agreements, novated leases could give your employees access to further potential GST savings on top of the income tax reduction.
This depends on the policy you offer. By taking the cost to purchase and run a car from before-tax income, a novated lease could mean that your employee won’t need to finance up to $6,334 during the FY24/25 financial year for the GST on the purchase price or ongoing running costs.
Read more: All your novated leasing FAQs answered.
Novated leasing in 3 easy steps
How to set up a novated lease program
Introducing a novated lease program is simple with Fleetcare. Here’s how you can get started:
1. Choose the right provider
Select a leasing provider that offers a seamless onboarding experience and ongoing support. Fleetcare specialises in cost-effective, low-maintenance solutions tailored to your business needs.
2. Educate your team
Communicate the benefits of novated leasing to your employees. Highlight how salary sacrificing for a car could save them money and boost their take-home income. You are welcome to use our extensive resource library to help spread the word.
3. Simple setup
Our onboarding process is as simple as it gets, helping your employees access their dream car sooner and ensuring you enjoy all the benefits of novated leases for employers without stress.
All you need to do is:
- Sign an agreement confirming your role in facilitating the salary sacrifice
- Enter pre-tax and post-tax deductions into your payroll system (e.g., MYOB or Xero)
From there, we manage all ongoing administration so you can focus on running your business without distractions.
Enjoy all the novated lease benefits for employers with Fleetcare
Offering novated leasing is a win-win for employers and employees alike. It’s a cost-effective way to boost employee satisfaction, attract top talent, and potentially reduce payroll costs – all while demonstrating your commitment to supporting your team’s financial well-being.
With Fleetcare, setting up a novated lease program is hassle-free and entirely cost-neutral.
Get the Fleetcare advantage and get all the benefits of novated leasing for your business today.
Contact Fleetcare on 134 333 to find out more.