Novated Lease
A novated lease is quite simply a method of purchasing a car using pre-tax dollars. Normally we arrange this through your employer.
Your car lease payments are deducted from your salary before tax is calculated, thus reducing your perceived taxable income and in turn reducing your tax bill. Buying your next car with a novated lease will actually save you money!
As an Australia wide company we are able to arrange the best deals for you in any state, with any dealer. Cars are our passion so you can rely on us to find you the best deal, no matter how specific your requirements may be.
Benefits of Novated Leases for Employees
- Save money through salary sacrificing. By "sacrificing" a portion of your salary each month towards the cost of your car you are in fact reducing your taxable income and saving yourself money.
- Get the car you want, at the best price possible. We know the dealers, Australia wide, and can broker the best deal possible
- By incorporate running costs into your novated lease you spread the costs of running a vehicle evenly throughout the term of the lease and removes the GST component.
Benefits of Novated Leases for Employers
- Make your staff feel valued, by introducing salary sacrificing with a novated lease, you are offering your employees the opportunity to purchase a car using pre-tax dollars. This reduces their tax bill, making their salary go farther thus increasing the value of their take-home pay.
- There is no cost for the employer.
It's easier than you think - how to obtain a novated lease
- Find out if your employer offers salary sacrificing or is prepared to investigate this as an offering.
- Tell us what car you want and how far you expect to travel in one year.
- We will negotiate the best price and give you a quote for the vehicle, finance and all running costs. We will clearly show you how much you will save each year.
- If you wish to proceed we will prepare your finance application and novated lease documentation.
- The Deed of Novation and and Salary Package Quotation will be signed by your employer.
- Following settlement we will advise you and the dealer that the car is available for delivery.
- The vehicle is delivered, and your monthly salary deductions commence.
Please note: If you are a government employee we will provide all information to the relevant Bureau responsible for managing your salary package.
Novated Lease FAQ
What is a novated lease?
A novated lease is quite simply a method of purchasing a car using pre-tax dollars. Normally we arrange this through your employer. Your car lease payments are deducted from your salary before tax is calculated, thus reducing your perceived taxable income and in turn reducing your tax bill. Buying your next car with a novated lease will actually save you money!
Can any employer set up a novated lease scheme with Fleet Network?
Yes. There are many advantages to doing so. Go to our Employer Information page and find out more.
Can anyone buy a car with a novated lease?
Yes. Many companies already have a scheme running but you can still benefit from the savings even if your company has not yet signed up. Go to our Employees Information page and find out more.
Can I arrange other car related expenses through my novated lease?
Yes, and we recommend you do so that we can save you the GST on those as well. We can arrange to incorporate all of your running costs (fuel, regular maintenance services, tyres, and insurances etc) through your novated lease.
Why should I arrange to incorporate running costs into my lease?
By incorporating running costs into your lease you will be spreading these costs evenly throughout the term of the lease. There will be no need to suddenly find a lump sum when your car goes in for a service, for example. We are also able to ensure that the running costs you pay, like the initial vehicle purchase price, do not include GST. Incorporate your costs – spread the bills and take away the GST. We are all about saving.
How are running costs calculated?
Every driver is different. Your running costs are based on the make and model of your car, the location in which you live, the expected kilometres you will travel as well as the level of insurance, price of fuel and other specific individual choices you will make. If you overestimate at the end of the lease you receive this overpayment back as a cash surprise! Conversely, if you underestimate the use of your vehicle it may be necessary to increase the regular payments to make up the shortfall. Give us a call on 1300 738 601 and we will help you calculate your usage.
Why choose Fleet Network?
We only deal in cars so if it is a car you are after talk to the experts. Our passion is to get you moving in the car of your choice at a price to fit your budget, wherever in Australia you may be.
What are the tax implications of a novated lease?
Under a Novated Lease the employee saves income tax whilst enjoying unrestricted private use of the vehicle of his or her choice. The vehicle is owned by the employee and can be retained if changing employer. The employee does not pay GST on the purchase of the vehicle or monthly lease payments. The GST is paid by the employer and claimed back as an input tax credit on their monthly BAS.
Fringe Benefits Tax (FBT) is also payable on the benefit provided through the Fully Maintained Novated Lease, and this expense is normally passed on to the employee. In the past the FBT was calculated based on the value of the car against the distance travelled each year, with the benefit increasing as the annual distance travelled increased. Following the 2011 budget handed down in May this will be phased out over the next three years with a flat 20% regardless of kilometres, applying from 1 April 2014. Any FBT liability can be offset through post tax contributions to vehicle running costs. This is called the Employee Contribution Method - ECM
What is Fringe Benefits Tax (FBT)?
A fringe benefit is a 'payment' to an employee, but in a different form to salary or wages.
According to the fringe benefits tax (FBT) legislation, a fringe benefit is a benefit provided in respect of employment. This effectively means a benefit is provided to somebody because they are an employee.
It could be a car, laptop, a loan, reimbursing school fees etc. Every benefit has a taxable value that is the basis for calculating the fringe benefit tax payable.
What happens if I have a Novated Lease and I change jobs?
When your employment ceases so too does your Novation Agreement. The good news however is that the agreement is transferable. If you are planning to leave your current employment please contact us so we can discuss the options available to you and assist you with the process.
Which vehicles are eligible for Novated Leasing and salary packaging?
All new car or passenger vehicle can be salary packaged through a novated lease. Some light commercial vehicles and used vehicles are also eligible to be packaged but there are rules governing which vehicles you can package. In general terms the most important guide is that a vehicle must not be more than 8 years old or have travelled more than 200,000 kilometres at the end of the lease term.
What are the minimum & maximum terms (lease lengths) for a Novated Lease?
The usual term of a novated lease is 24,36,48 or 60 months. This decision is normally based on affordability and the age and value of the car.
