Zippy Finance highly recommend a novated lease to employees who wish to salary package their vehicle.
In order to be eligable for a novated lease, the vehicles must have a carrying capacity of less than one tonne and seat less than nine people.
The employee, in conjunction with their employer, signs a novated lease agreement for an agreed term (up to five years). Monthly rentals and a final residual payment are based on ATO guidelines. Running costs of the vehicle including monthly rentals may be salary sacrificed from the employee's gross pay, potentially reducing their taxable income.
The employer may pay some or all of the running costs of the vehicle including GST and may be able to claim an Input Tax Credit with respect to any GST incurred on such costs.
The employer should also be aware that the provision of a vehicle under a novated lease is a fringe benefit and Fringe Benefits Tax ('FBT') implications will need to be considered. Contact Zippy Finance if you are considering a novated lease, we can fill you in with the details and help you understand your options.