Novated leasing offers government employees an innovative solution for purchasing their new car and saving thousands. Find all the information needed about novated leasing for Queensland government employees here.
This information is general and should not consider your circumstances. For best results regarding NSW government novated lease, seek legal, financial or other professional advice tailored to you and your situation.
1. Tax savings
Government employees can realise significant income tax savings with novated leasing as payments come directly from their pre-tax earnings compared to car loans requiring after-tax income repayment. Novated leasing may also help government employees save on Fringe Benefits Tax (FBT), payable by employers on certain employee benefits such as car running costs and maintenance.
Employers taking advantage of this exemption won’t need to pay FBT on fully maintained NSW government novated lease agreements for eligible EV cars used professionally and personally, making this incentive particularly advantageous in departments with a large percentage of staff driving electric vehicles for work and personal purposes.
2. Flexibility
NSW government novated lease effectively controls running costs like fuel, oil, servicing, repairs, tyres and registration. They’re an ideal way to avoid costly repairs while taking advantage of GST savings on vehicle purchases and running costs.
While many employees understand the advantages of novated leasing arrangements, some HR leaders often express reservations—their main concerns often centre on cost and benefits availability.
HR professionals often ask whether novated lease programs will incur fringe benefit tax (FBT) liability for employers. While this may happen, it usually depends on the arrangement is set up.
An effective solution would be a fully managed novated leasing service ensuring all employee inquiries, administration and reporting are handled by an expert provider who handles every aspect of novated leasing – providing HR with peace of mind that no FBT charges are being incurred.
3. Choice
Novated leases are an agreement between you, your employer, and a leasing company that handles your administrative work. They can source a vehicle GST-free for you and effectively “lease” it out – giving you greater buying power by covering both its operating costs (fuel/maintenance/tyre replacement/insurance premiums, etc.) from pre-tax salary payments.
Your employer often allows salary packaging providers it selects to take it easy, forgetting they must still compete against other providers for your business. It can mean they do not offer you the best possible deal or increase fees and interest rates until all your savings have completely vanished.
4. Convenience
Novated leasing is one of the easiest and most cost-effective ways to purchase and run a car. By paying from your pre-tax salary for vehicle purchase and operating costs (like registration costs) over an agreed term period, novated leasing could save thousands over its lifecycle. Plus, you’d avoid GST!
Novated leasing is a three-party agreement involving employees, employers and financiers. Financial obligations of novated leases are transferred to employers via standard deed of novation agreements; this reduces an employee’s taxable income while enabling employers to claim back any GST on car expenses. Any remaining obligations will be payable either at the end of the lease term or upon employment termination during its term.
5. Insurance
Your employer takes money from your pay before tax to cover lease and car running expenses, lowering taxable income and increasing disposable cash. In addition, GST savings for finance repayments, registration costs, fuel purchases, and tyre replacement are achieved as a result.
Novated leasing is an agreement between you, your employer and one of our novated leasing panel’s financiers that allows you to salary package a new or used car* and all its running costs – insurance, finance charges, stamp duty, service maintenance tyre.
Government employees don’t have to select from a predetermined list when choosing their novated lease car – any vehicle approved for use by their department may qualify, including zero-emission cars, which qualify for generous Fringe Benefits Tax (FBT) exemptions.
Novated leasing is one of the most cost-effective ways to buy and run a car. The salary packaging program allows you to pay for your vehicle and its running costs using pre-tax dollars. It can reduce income tax and access GST savings, including vehicle purchase price, budgeted fuel, servicing, tyres, maintenance and Vero comprehensive motor insurance.