Government employees can save thousands with an ACT health salary packaging novated Lease. This all-inclusive salary packaging option enables you to pay for your car and all its running costs from pre-tax income, thus lowering income tax payments and unlocking GST savings.
Advertised novated leasing solutions often assert that employee vehicle purchase prices are GST-free. At the same time, this statement may be accurate, but it does not capture all aspects of vehicle acquisition costs for an employee.
Benefits
ACT health salary packaging novated leasing offers an innovative way to finance your car and save thousands. Available through salary packaging arrangements with many Australian employers, novated leasing allows you to package the cost of purchasing and operating costs into monthly payments that fit within your budget. It may even allow you to include registration, fuel, tyres and insurance costs as additional expenses; whether the actual benefits depend on income, expenditure, or both will determine just how much advantage there will be from using one.
Tax savings
ACT health salary packaging novated leases are agreements between an employee and their employer that allow the former to cover some or all of a car’s lease and operating costs using pre-tax salary deductions, thus lowering an employee’s taxable income and saving them thousands in taxes over its lifecycle. But there are some essential things to remember when contemplating such arrangements.
Before signing, it’s essential to understand how a novated lease works. A novated lease involves three parties: an employee, their employer and financier (in this case, the finance company owns the car, but payments are made directly by employees as conditions of employment to their finance company); therefore, if an employee changes jobs they’ll continue making payments (and may face tax consequences as a result).
Salary packaging companies sometimes advertise that employees can avoid GST when purchasing vehicles through novated lease agreements; however, this may not always be true. Your circumstances and costs of running the new car will determine whether salary packaging can effectively help to reduce your tax bill. A novated lease arrangement is just one-way government employees can utilise it to maximise tax savings – you could also package other items like self-education expenses and professional development activities to optimise tax savings further.
Superannuation contributions
As a government employee, you can use your salary to purchase and run the costs of a motor vehicle through a novated lease arrangement. It can reduce taxable income and stretch your dollars further. When considering this option, it is essential to carefully examine total lease costs such as registration, fuel and tyre expenses, and ongoing running expenses each year to see how much can be saved with such a lease arrangement.
How effective a novated lease will be depends on the vehicle and personal circumstances you select, along with any arrangements with your employer for making salary sacrifice payments or regular payroll deductions. When considering this form of financing, remember that permanent and casual employees must contribute between 2%-5% of their salary towards superannuation contributions (via payroll deduction or salary sacrifice payments) according to the law.
Novated leases offer another valuable benefit in terms of salary packaging: extra superannuation contributions, personal loan repayments, health and fitness membership fees, as well as expenses associated with financial planners or insurance policies can all be incorporated into a novated lease and used to reduce your tax bill in the long run. Check our salary packaging calculator and speak to your employer about all the possibilities for salary packages through novated leasing arrangements.
Equipment
Novated leasing makes acquiring quality equipment easy, helping you be more productive while saving money in the long run.
Laptops are among the most sought-after equipment, though other items, such as tablets and phones, may also be eligible. When searching for the ideal model to lease through novate leasing, compare pricing across models to find your best value proposition – this can be especially important if you want a high-end model worth every extra cent spent.