Non Maintained Novated Lease
Under a Non-Maintained Novated Lease the lessee is responsible for all maintenance and other running costs of the motor vehicle.
Flexibility of a Novated Lease
Tax Benefits of a Novated Lease
The concept of novated leasing is central to salary packaging arrangements between an employee and an employer.
Under a salary packaging arrangement, an employee agrees to forego a portion of their salary or wages in return for benefits equal to that amount.
For a novated lease, the lease and running costs of the motor vehicle, and fringe benefits tax (if applicable) are deducted from the employee’s pre-tax salary, and PAYG is calculated on the reduced salary or wages.The tax benefit of a novated lease arises from the concessional fringe benefits tax treatment on the car, with the lease and running costs being FBT exempt.
Depending on the employee’s individual financial circumstances, salary packaging a motor vehicle under a novated lease can have the effect of increasing an employee’s net disposal income
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