FAQs

When salary packaging a car, the vehicle and the arrangements must meet ATO guidelines. Both employer and employee must agree to the type of vehicle.

No. The employer must agree to take on a Novated Lease for an employee. The lease is in the employer business’ name.

Leasing typically attracts a lower interest rate than personal car finance.

When approving a Novated Lease application, the credit profile of the employer not the employee is assessed.

Employees should consider the long term implications of leasing including staying with that employer over the full term or having to payout the lease to obtain ownership if leaving the company.

Employees may save with lower rates on lease vs personal car loans. They may save on income tax if the salary packaging moves their taxable income to a lower tax bracket.

Private car buyers can select from a secured car loan, unsecured personal loan or a Novated Lease with Salary Sacrificing.

Salary packaging involves deducting the amount to cover the lease and expenses of a motor vehicle from pre-tax salary. This may move the employee into a lower tax bracket.

With salary packaging, the full costs of the lease, rego, insurance and maintenance need to be sacrificed. These costs with business rego and insurance would need to be compared with personal rego, insurance and personal v commercial interest rates.

If an employee leaves the employer prior to the end of a Novated Lease term, they would need to come to an arrangement with the employer to pay out the lease to get ownership of the car. This may be achieved by taking on a personal car loan.