| is a novated lease? | | | | benefit (such as a car provided through a novated |
| A novated lease is three way agreement between | | | | lease agreement) as a result of being an employee. |
| an employee, employer and finance company. The | | | | This expense is payable by the employer but is |
| novated lease is paid off using the employeeís | | | | generally passed on to the employee. The FBT can |
| pre-tax salary (salary sacrifice) but the employer is | | | | be offset through employee contributions to the |
| ultimately liable for the repayments for the term of | | | | carís running costs. |
| employment. | | | | Is a novated lease right for me? |
| What are the benefits of a novated lease to me as | | | | A novated lease may suit you if: |
| an employee? | | | | - you are an employee and you want to purchase a |
| - The employee does not pay GST on the vehicle | | | | car as part of your salary package. A novated lease |
| purchase price and maintenance costs of a novated | | | | can be used to finance a personal or business vehicle. |
| vehicle. | | | | - you are a business wanting to offer a benefit to |
| - The employee can pay out the balloon payment at | | | | your employees. |
| the end of the novated lease in order to own the | | | | Do I pay interest on a novated lease? |
| car outright. | | | | Yes, the interest rate on a novated lease is fixed, so |
| - The novated lease offers income tax savings as it | | | | you know exactly what your repayments will be for |
| is paid for with pre-tax salary. | | | | the life of the novated lease. |
| - A car used for 100% private use can be financed | | | | What is residual value? |
| through a novated lease. | | | | Residual Value is the amount of money you owe at |
| - Maintenance costs including fuel, oil, servicing and | | | | the end of the novated lease. It is set at the start |
| tyres can be included in the salary sacrifice. | | | | of the lease. GST is payable on the residual value. |
| - A fleet discount can often be accessed when | | | | Can a novated lease have a small or no balloon |
| taking out a novated lease. | | | | payment? |
| What are the benefits of a novated lease to me as | | | | There is some flexibility in the size of the balloon |
| an employer? | | | | payment at the end of the novated lease. |
| - Offering a novated lease allows you to add value | | | | Can I use a novated lease for something other than |
| to staff remuneration without a pay rise. | | | | a new car? |
| - The employee is responsible for the leased vehicle | | | | Yes, a novated lease can be used for financing a |
| when they leave or at the end of the novated lease, | | | | used car. A sale and lease-back arrangement even |
| so you have no disposal risk and no excess fleet. | | | | means you can take a novated lease on the car you |
| - A novated lease offers tax benefits on deductible | | | | own now. |
| expenses. | | | | What happens if I miss a repayment on my novated |
| - Novated leasing can result in lower costs such as | | | | lease? |
| Payroll Tax and WorkCover premiums . | | | | The novated lease is guaranteed by your employer, |
| How does a novated lease affect tax? | | | | so if you are having difficulties making novated lease |
| Under a novated lease agreement, the employer can | | | | repayments, you should contact your employer as |
| claim Input Tax Credit on the purchase price and | | | | soon as possible. |
| lease repayments. This benefit is passed on to the | | | | How do I apply for a novated lease? |
| employee, so effectively the employee is not liable | | | | Contact 360 Financial Services or apply online for a |
| for GST during the lease. FBT generally applies to any | | | | novated lease. |