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JSA Group’s Novated Leasing makes owning and operating a car much cheaper. It also offers employers an effective way to salary package without excessive administration.
You may be an individual wanting to know if your employer offers salary packaging for your car. Or you may be an HR manager looking for an easier way to offer an employee incentive without the excess paperwork. Talk to us about how we can help with your salary packaging needs through Novated Leasing.
What is Novated Leasing?
A Novated Lease is a three party agreement made between you, your employer and the financier, whereby you enter into a finance lease. A second document, called a Novation Agreement, is used to transfer some of your lease obligations to your employer. A Novated Lease is a form of salary packaging. This allows your personal car to be treated like a company car for tax purposes, which can provide you with significant income tax and GST savings.
It is important you understand that when you enter into a Novated Lease you are ultimately responsible for paying for the car.
Is Novated Leasing for you?
Here are some of the benefits of Novated Leasing to you and your employer.
|For Employees||For Employers|
|GST savings on new car purchase price||Outsourced administration and paperwork|
|Keep your current car with cheaper running costs (through sale and leaseback)||Effective recruitment and retention incentive|
|Tax-free fuel*||No fees payable or early termination penalties if the employee leaves|
|Complete car management with monthly tax-free lease repayments||No equity in leased vehicles, therefore no direct liability or balance sheet reporting requirements|
|Tax-free running costs like servicing, registration, repairs and insurance||Minimises risk through Novated Agreement|
|Reduce your taxable income||Claim an input tax credit on GST paid on the lease|
|Take your car with you if you leave||No need to reallocate vehicles if the employee leaves|
*subject to your employer’s GST status and their salary packaging policy.
How does JSA Group manage my Novated Lease?
We help car owners set a budget for all the expenses required to run their car, including the finance, fuel, maintenance, registration and insurance. To maintain your Novated Lease, your employer deducts a regular payment each pay cycle from your salary and remits the money to pay for all of your car’s running costs.
When the term of your lease has expired, you have a contractual obligation to pay the residual value. The residual value is the pre-determined value of the car at the end of the lease contract including GST, and is set by the ATO. You also have the option to re-finance the lease for a further term.
Who is eligible for a Novated Lease?
You do not have to be on a high wage or drive long distances to benefit from a novated lease. It’s possible to benefit from a Novated Lease earning $25,000 or more and mostly using your car for private purposes.
Accessories and extras
When you salary package a car with a Novated Lease, it is also important to understand what you can and cannot claim for reimbursement. We can advise you on how to claim for extras.