Salary sacrificing made simple
What is salary sacrifice?
Salary sacrifice is an arrangement with your employer that gives you a financially savvy way to reduce your taxable income by purchasing certain goods or services using your pre-tax salary. Buying a new or used car with your pre-tax income is a popular salary sacrifice method because you can roll all of your vehicle expenses into a single fortnightly payment that is deducted from your salary before tax. This method of salary sacrifice is called a novated lease.
What is a novated lease?
A novated lease is a salary sacrifice option that lets you pay for a new or used car of your choice from your pre-tax salary. It’s an agreement between you, your employer and Fleetcare. Once you choose your car, Fleetcare will arrange the best price for you through our range of dealer networks. You complete a finance application and Fleetcare will arrange a lease agreement with your employer for the vehicle. Your employer then deducts the cost of the lease from your pre-tax salary.
How will this save me money?
- By paying for your new car with your pre-tax income, you reduce your taxable income, which means you may pay less tax. You pay no GST* on the purchase price, or ongoing expenses like fuel and servicing – that’s a 10% saving right there!
- Half price car washes and the ability to earn BP Rewards points at BP service stations.
- You’ll receive national fleet discount pricing on the vehicle cost and ongoing expenses.
- Smooth your expenses and never have to worry about finding the money for new tyres again – it’s all included in your fortnightly payment!
- Find out how much you can save - Use our salary sacrifice calculator.
What happens at the end of the novated lease?
At the end of the lease, you have three options:
- Purchase the vehicle outright by paying off the residual value.
- Extend the lease and refinance the residual value.
- Start a new lease with a new car by trading in your car to Fleetcare or selling it privately. The quick brown fox jumped over the laxy dog. The quick brown fox jumped over the lazy dog.
How do I know if I’m eligible for salary sacrifice?
As long as you are past your probationary period and your employer is happy to enter into an agreement with us, you’re eligible! You will need to check with your employer to see whether or not they offer salary sacrifice. If they haven’t done so before, you can point them to our Novated for Employers page on our website, or have them call us on 134 333. We’d be happy to answer any questions they might have.
Disclaimer: The information provided does not take into account your personal financial needs and does not constitute legal, taxation or financial advice. GST savings are dependent on your employer’s policy and accounting treatment of GST. Before making a decision you should seek independent financial, legal and taxation advice and clarify your employer’s willingness to pass on input tax credits.