Many employers and employees are still unclear about what salary packaging is, and what the benefits are of these arrangements. One of the key advantages of buying vehicles and making other large scale purchases through salary packaging is the tax benefits that can be enjoyed.
Tax benefits of novated leasing
Purchasing a car through a novated lease can work out much cheaper for employees, as the finance company leasing the vehicle is usually liable to pay GST. This means that vehicle owners can benefit from a flat 20% of taxable deductions when making payments, provided the vehicle is used for business in some capacity. Employers can also claim GST credits when offering novated leases to their employers through financiers, which can also involve a fringe benefit.
Other salary packaging benefits
When you arrange a novated lease, you can also enjoy tax benefits when paying for your car’s running costs, including fuel payments and maintenance. All of these standard running costs may be covered by a fuel card, which offers a single, convenient bill for all car-related expenses that can make it easier to claim these back if the vehicle is for company use. Motor insurance and other expenses will also usually be included in the novated lease.
Lease a car in Perth
Fleet Network administers an individual’s purchase of novated lease vehicles across Australia through employers and sponsoring organisations. Find out more about novated leasing and how to salary sacrifice by calling 1300 738 601 or our Get a Quote page