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Salary sacrificing to buy a car

Salary sacrificing can help you get a new car as well as reduce what you pay in tax

What is salary sacrificing?

Salary sacrificing is a financially savvy way to reduce your taxable income by purchasing certain goods or services using your pre-tax salary.

Also known as salary packaging, salary sacrifice is an arrangement between you, your employer and the provider of goods or services. Salary sacrifice allows you to “sacrifice” some of your salary to pay for items using pre-tax dollars, effectively reducing your taxable income and putting more money in your pocket each pay day. It is a good alternative to buying a car outright or getting a car loan.

Buying a new or used can with your pre-tax income is a popular method of salary sacrificing, because you can roll your vehicle expenses into a single payment that is deducted from your salary before tax. This method of salary sacrificing is called a novated lease.

How can I use salary sacrificing to get a car?

A novated lease is a hassle-free vehicle leasing solution that saves you money on everything from vehicle finance, to fuel, maintenance, and roadside assistance.
It’s a salary sacrifice arrangement, which means your vehicle and associated running costs are bundled into a single payment, which is deducted from your pre-tax salary. You'll enjoy great fleet discounts, GST savings and a reduced taxable income, along with the convenience of a single payment for all vehicle expenses.

How does salary sacrificing a car work?

How will novated leasing save me money?

  • Pay less tax by paying for your new car and related expenses from your pre-tax income.
  • You’ll receive fleet discount pricing on the vehicle cost and ongoing expenses.
  • Half price car washes and the ability to earn BP Rewards points.
  • Enjoy peace of mind 24/7 driver support, always on hand to offer advice in any way they can.
  • With vehicle running costs included, never worry about unexpected out-of-pocket services and repairs
  • You pay no GST on the purchase price, or ongoing expenses like fuel and servicing – that’s a 10% saving right there!
  • Smooth your expenses and never have to worry about finding the money for new tyres again - it’s all included in your fortnightly or monthly payment!

Want to know more about salary sacrificing a car?

Disclaimer: Income Tax savings are dependent on your taxable income and individual tax status. GST savings are dependent on your employer’s policy and accounting treatment of GST.