Employers
How does it work?
A novated lease is a three-way agreement between an employer, the employee, and a financier. The employee gets to choose the vehicle they want and have the vehicle payments deducted as part of their salary packaging agreement, from either pre-tax or post-tax income, or both.
What are the benefits?
​Employer benefits
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There's no cost to the employer
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Entice new talent, and retain staff with this great option
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All leasing obligations fall onto the employee
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Employee novated leased vehicles are not considered an asset or liability for the company
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It can help to lower statutory charges and taxes.
​Employee benefits
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Leasing lowers taxable income, putting more money in your employee's pocket
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Employees get their choice of vehicle
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100% private use of vehicles (excludes FBT exempt vehicles)
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Ease of budgeting
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Hassle-free payment options
What if novated leasing isn't right for our business?
Your employee can still take advantage of our Keep Your Motor Running service which will allow them to enjoy many of the same perks as vehicle leasing.
Questions and answers
Are there any FBT implications for businesses?
Fringe Benefits Tax (FBT) is a federal tax that employers pay on certain benefits, aside from salary or wages, that are provided to their employees, and is calculated on the taxable value of the benefit.
A leased vehicle for an employee’s personal use, under a novated lease for employers arrangement, is a common fringe benefit. The FBT payable is calculated using the Statutory Formula Method on the vehicle’s base value, e.g. purchase price including GST, and does not include any on-road costs.
To help offset the cost of FBT payable on a novated lease, employees can use post-tax funds from their salary, known as Employee Contribution Method (ECM) which reduces the taxable value of the vehicle and FBT payable.
Apex Novated Solutions will provide you with an end of FBT year report to assist you in completing your Annual FBT return for the ATO.
What happens when an employee leaves/end of the lease?
The novated lease will end when the employee finishes employment with your company. If your employee is leaving, they have the following options:
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Transfer the novated lease to their new employer
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Move their novated lease to a finance lease and speak to Apex Novated Solutions about our ‘Keep your motor running’ program
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Move their novated lease to a finance lease. This means that the employee would be responsible for making payment of vehicle costs from their post-tax salary or savings.
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Payout their lease
What is included in a novated lease?
The following costs can be included in your novated lease:
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Finance
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Fuel
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Servicing and maintenance
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Tyres
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Registration and CTP
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Comprehensive insurance
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Roadside assistance
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Car washing and detailing
What is the Employee Contribution Method (ECM)?
The Employee Contribution Method allows you to make post-tax payments towards your novated lease to offset your employers Fringe Benefits Tax (FBT) liability.
