Your EOFY guide to novated leasing

With the end of financial year approaching, now is the perfect time to think about how you can reduce your tax bill.

Novated leases are a great way to do just that – they help reduce your taxable income by allowing you to pay for a car out of your pre-tax salary (sometimes called a 'salary sacrifice').

In this article, we answer some frequently asked questions to help you better understand how novated leasing can work for you.

Is a novated lease a good idea?

When the right person takes out a novated lease and it is managed correctly, novated leasing is a game-changer and can help you save thousands.

You pay for the car and all of its running costs out of your pre-tax income, meaning you can save thousands of dollars in income tax and GST each year, simply by ‘novating’ your car.

If you earn $70,000 per year (before tax), for example, and your annual novated lease payments add up to $10,000, you could lower your taxable income to $60,000.

What’s included in a novated lease salary package??

A novated lease can include the car and its running costs.

Think fuel, servicing, tyres, insurance, roadside assist and even your rego. The more you include, the bigger your tax savings.

Unlike most providers, we are flexible with our packages. So, whether you want basic, tailored or full coverage, we have you sorted.

Will I need a tax accountant for my novated lease??

Because all payments are handled by your employer, a novated lease doesn’t add complexity come tax time.

All you need to do is submit your tax return as normal.

All of your vehicle expenses will be rolled into your novated lease and taken care of by your employer.

It’s as simple as that.

How does Fringe Benefits Tax (FBT) affect novated leases??

FBT is a tax the government places on any benefits you receive from your employer that is related to personal use.

Any situation where your employer pays for a car on your behalf that you use outside of work may therefore result in an FBT liability.

Novated leases can create this FBT liability too, but our team specialises in looking at your unique circumstances and doing what we can to offset this for your employer.?

What are the other benefits of a novated lease?

Novated leasing isn’t just about reducing your taxable income, it’s your ticket to financial freedom.

By doing what you can to save on tax, you can strengthen your financial wellbeing and grow your wealth.

Not to mention that with a novated lease, you can get the new or used car of your dreams.

There are even more benefits available for novated leases with electric vehicles (hello Polestar 4). You can read more on that here.

Have a question?

Reach out at [email protected]