Salary Sacrificing to Buy a Car

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TL;DR

Salary sacrificing lets you use part of your before-tax income to pay for certain goods or services - helping you to potentially reduce your taxable income so you could take home more each pay.

One popular item to salary sacrifice is a car and its regular running costs, with a Fleetcare novated lease. You could enjoy tax and GST savings, fleet discounts, and the convenience of one regular all-inclusive payment that covers your car finance, fuel or charging, rego, insurance, tyres, and servicing.

What is Salary Sacrificing?

Salary sacrificing allows you to pay for certain goods or services before your income tax is taken from your salary. It's an arrangement between you, your employer and a goods or services provider. By paying from some of your before-tax salary, your taxable income is reduced, meaning you could pay less tax and keep more of what you earn. Depending on your industry, there are few things you could be eligible to salary sacrifice.

When you use salary sacrificing to get a car, it’s known as a novated lease - a convenient, tax-effective way to drive the car you want while simplifying all your running costs.

If you choose an eligible electric car, thanks to the Federal Government's Electric Car discount, all your cars' payments are made before-tax, which means you could take home even more pay. Find out more about the Electric Car Discount.

How Much Could I Save Salary Sacrificing?

The potential savings come from using some of your before-tax salary for car expenses instead of your after-tax income.

You could save on:

Income tax (by lowering your taxable income)
GST on the purchase price of the car and ongoing running costs
The new car driveaway price, through Fleetcare's fleet discounts

Here's a quick example:
If you’re earning $85,000 annually and choose to salary sacrifice a car for about $39,700 through a 5-year novated lease and drive 15,000kms per year, the amount you spend on your car each pay could be significantly lower than paying for the same car and expenses after tax.

Exact savings vary depending on your income, car type, and driving habits - but many drivers find salary sacrificing helps make their next car affordable and ongoing budgeting more convenient.

Compare salary sacrificing a car

Thanks to salary sacrificing, Fleetcare’s vehicle discounts and GST savings over the 5 years, you could save over $15,900 and pay around $223 per week.

	Without Salary Sacrifice	With Salary Sacrifice
Annual Salary	$85,000	$85,000
Before-tax car expenses	$0	-$6,391
Income tax	-$17,988	-$15,943
After-tax car expenses	-$13,827	-$7,232
Take home pay	$53,185	$55,434
Take home pay per week	$1,023	$1,066

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. Figures may alter based on an individual’s circumstances and are subject to change.

How Does Salary Sacrificing Work?

With Fleetcare, salary sacrificing a car is easy.

Choose your car
Pick the car you want - new, used, or even your current one.
Apply and we’ll handle the rest
Complete your finance application and we’ll set up the novated lease agreement with your employer.
Enjoy the drive (and the savings)
Take delivery of your car and start enjoying the ease, budgeting benefits, and potential tax savings of salary sacrificing with Fleetcare.

Your regular lease payment - which includes finance and all running costs - is then automatically deducted from some or all of your before-tax pay depending on the car you choose. That means one seamless payment covering:

Car finance
Fuel or charging
Registration and insurance
Servicing and tyres
Roadside assistance

Because everything is bundled into one easy payment, it’s simpler to stay on top of your regular car costs - from fuel or charging to insurance and servicing. Fleetcare will help you manage your lease every step of the way.

Comparison table - Without Novated Lease vs With Novated Lease vs With Electric Vehicle Novated Lease

Am I Eligible for a Novated Lease?

A novated lease is available to many Australian employees, but eligibility depends on a few practical factors. In simple terms, you need to be employed, earn a regular salary and have access to salary packaging through your employer.

You’re more likely to be eligible for a novated lease if you:

Are a full-time or part-time employee
Receive a regular salary (paid before-tax)
Work for an employer that offers salary packaging

Many people assume novated leasing is limited to certain industries, but that’s not the case. Employees working in the private sector, healthcare, education, not-for-profit organisations and government roles may all be eligible.

In some cases, you may still be eligible if you are:

A contract or casual employee
New to your role
Working for an employer that doesn’t currently offer novated leasing

Your employer doesn’t need to have an existing novated leasing program in place. Fleetcare can often work directly with employers to help set things up, with minimal involvement required from payroll or HR.

Eligibility can also depend on factors such as your income, employment stability and the type of car you’re looking to get. These help determine whether a novated lease is suitable for your situation.

If you’re not sure whether you qualify, Fleetcare can help with a quick eligibility check to confirm whether a novated lease could work for you and what your options might look like.

Salary Sacrificing for an Electric Vehicle (EV)

You can also salary sacrifice an electric or plug-in hybrid car through a novated lease - just like a petrol or diesel one.

Eligible EVs may qualify for the Electric Car Discount, allowing for 100% before-tax payments on eligible zero and low-emission cars that meet ATO requirements. That could make salary sacrificing an EV even more affordable and potentially save you thousands more.

Your lease can also bundle charging costs, rego, insurance, tyres and servicing into one easy before-tax payment - plus optional support for home charger setup and access to Australia’s largest public charging network through Chargefox.

With Fleetcare, switching to an EV is simple, cost-effective and ready for the future. Check out our current EV deals to see what’s available right now.

How to Get a Great Salary Sacrifice Deal

Fleetcare makes salary sacrificing simple from start to finish. We'll help you:

Compare quotes and vehicle options

Access exclusive fleet discounts on new cars

Understand your potential tax savings

Handle all the setup and ongoing management with your employer

You’ll also have the support from our team of experts every step of the way through the life of your lease. And when you’re ready to start looking for a car, you get access to our latest offers and discounts through the Fleetcare novated showroom.

Drive Smarter with Fleetcare

Salary sacrificing isn’t just about saving on tax - it’s about simplifying how you manage your car.

With one easy regular payment and ongoing support from Fleetcare, you’ll spend less time worrying about costs and more time enjoying the drive.

Want to find out more?

Frequently Asked Questions To help you understand if a novated lease is right for you, we've answered our most common questions. Register for a Webinar Join us for live webinar where we answer your questions about novated leasing. Car Reviews We test, rate and review the latest cars so you can choose with confidence.

Ready to get started?

Find out how much you could save through salary sacrificing with a Fleetcare novated lease.

Important Information: Disclaimer: The information provided is for general informational purposes only and does not take into account your specific needs, circumstances, or objectives. It is strongly recommended that you consult with a qualified financial advisor before making any decisions based on this information. Fees, conditions, eligibility and credit approval criteria may apply.

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