Loading…

Novated Lease

nl1

Overview

Novated Leases are a great way for employees to get into the car they want while gaining tax advantages through salary packaging. And it has benefits for employers too.

A Novated Lease is an agreement between three parties: PAR Leasing, the employer and the employee. The employee leases the vehicle directly from PAR Leasing, and the employer agrees to make all payments due under the agreement. The employer covers these costs via a salary package with the employee.

In the event of the employees employment terminating, following advice to PAR Leasing, the employee may set up a new arrangement with their new employer and PAR Leasing. By entering into a Novated Lease, the employee's monthly lease rental is deducted from their gross salary (before PAYE tax and Medicare Levy) leading to a lower income tax and therefore a higher net salary.

All operating costs including servicing, tyres, fuel, registration and insurance can be included in the monthly lease rental, which is incorporated in the salary package and paid for by the employer on the employee's behalf. The employee can choose a vehicle that suits their lifestyle and business needs and can retain the vehicle if they change jobs. You enjoy the benefits of our purchasing power, which can result in lower acquisition and running costs.

The employee's advantage of a Novated Lease are:

  • Enable the employee to use a company vehicle that they may not have previously qualified for.
  • Provides the employee with the opportunity to acquire the vehicle at lease termination.
  • Reduction in employee related "on costs".
  • Allows the employee to salary package.

The employer's advantage of a Novated Lease are:

  • Off balance sheet financing.
  • Employer bears no risk should the employee leave as the vehicle is leased to the employee.
  • Reduction in employee related "on costs".
  • An alternative financing mechanism.
  • Taxation benefits as the majority of expenses are tax deductible.

PAR Leasing can provide a variety of alternatives on your Novated Lease, including redundancy insurance, full maintenance and fuel.
Please Contact Us to find out more.