We’re ready to help you do it. Check out our novated lease calculator to see how much you can save.
Wondering what a novated lease is? We are here to explain what novated leasing is in simple terms for you? We are here to explain it in simple terms for you.
A novated lease is a salary packaging agreement that enables you to pay for a new or used car and its running costs. It’s a smart way to make the most out of your pre-tax salary.
> Watch our short video to learn more.
You know what a novated lease is now, but what about the benefits? Let’s take a look at some of the ways a novated lease can benefit you:
We’re ready to help you do it. Check out our novated lease calculator to see how much you can save.
A novated car lease is a salary packaging agreement that enables you to pay for a new or used car and its running costs, from your pre-tax salary. It’s a lease agreement between an employee, employer and a novated lease provider in Australia.
This employee funded car leasing scheme allows government and other employees to finance a car of their choice and all the running costs that come with it, using pre-tax income.
Sounds pretty good right? Take a closer look at the benefits of a novated lease package here.
Yes! One of the many benefits of a novated lease plan is that you can drive the car for 100% private use. The car is personally owned by you.
Take a look at the employee novated leasing benefits.
Take a look at the employer novated leasing benefits.
A novated lease covers not only the cost of your vehicle, but all the associated expenses too. Not to be mistaken for a self-managed lease where you have to budget for the maintenance and running of your car, a novated lease from Fleet Network covers everything from the lease payments, insurance, registration, and running costs such as fuel, tyres and servicing too.
No more budgeting headaches – yay!
For novated car leasing in Australia, there are no longer regulations on a minimum number of kilometres that need to be travelled and you don’t need to drive a great deal to save a great deal of money. Whether you drive 10,000kms, 100,000kms, less or more, a novated lease will help you save.
If you budget for a set number of kilometres and don’t drive then, this just means you’ll have surplus funds in your account and these can be paid back to you via your salary at any time you like – bonus! We can also increase your running cost allocations if you think you might do more kilometres than originally expected.
If you change employment during your novated lease agreement (these usually last 1-5 years), there are 3 things you can do:
Under the impression that you can’t salary package a novated lease because you’re not an Australian government employee? This isn’t the case. Providing you’re given approval from your private employer; you can start looking for your new wheels and then speak to Fleet Network to see how much you can save
When choosing your car through a novated car lease, there are some exclusions to the type of car you can purchase.
Common novated car lease exclusions include:
Some employers may have their own exclusions, so it’s important to check before making your car choice.
Once your choice is made, we can help you get a quote with our car lease calculator.
Think a novated lease might be right for you?
Great! We think so too, but here’s what you should ask yourself first:
At the end of the lease, you can:
To offset the reduction in your taxable income when salary packaging, the ATO adds another tax (yes, another one) called FBT on the benefits provided.
How is FBT calculated? Calculations are based on the car purchase price.
Want to reduce your FBT? Using the Employee Contribution Method (ECM), employees can partially or fully reduce their car cost with post-tax payments.
To learn more about the novated lease FBT employee contribution method, contact our friendly team today.
Not familiar with the term residual value? Don’t worry, we’re here to explain.
A novated lease contains a residual value (balloon amount) which is paid at the end of the agreement. This is an ATO requirement for all novated leases in Australia. The residual percentages are set in a scale based on the length of the term. In general, the longer the lease, the lesser the residual payment.
The ECM helps you reduce your FBT on a novated car lease. How? By contributing to your running costs using post-tax income. That’s right. Every post-tax dollar you spend towards the running costs of your car reduces your FBT by the same amount.
ECM is one of the best tax maximising methods there is. Talk to us to find out how the ECM can help you save on your novated lease.