Who would have thought that by taking out car finance you could increase your take home pay. Well it is true! By financing your car by way of a novated lease your car repayments are taken from your pre-tax income. This method is commonly known as salary sacrifice. By salary sacrificing you can instantly increase your take home pay. You could literally save yourself thousands of dollars each year. By using this same method to finance your partner’s car you will further increase the income for your household.

Salary sacrificing also allows you to pay for the running costs of your vehicle from your pre-tax income. Running costs include, registration, insurance, fuel and servicing. On an annual basis these costs are expense so to have them deducted from your pre-tax income is a great benefit. To find out more about the benefits of salary sacrificing speak to a Madison Finance Representative on 1300 887 967.

Are you thinking of taking out a novated lease? Whether you are an employer or an employee there are benefits to both parties. It is well worthwhile looking into the advantages of salary packaging. A novated lease is the agreement that exists to enable finance payments to be deducted from pre-tax income.

An employee benefits by taking part in a novated lease program in a number of ways. By salary packaging their vehicle they will instantly increase their take home income. As finance payments are taken from their pre-tax income, the amount of tax paid on the annual salary is reduced, thereby providing the employee with an increased income. A novated lease program also enables the employee to take out a fully maintained novated lease. This is when the running costs of the vehicle, such as fuel, servicing, registration and insurance are paid from their pre-tax income. This literally saves the employee thousands of dollars in tax each year. The employee may wish to salary package their partner’s vehicle to further increase the household income.

Apart from tax savings there are added benefits to salary packaging a vehicle. By salary packaging your own vehicle there is no need to conform to the restrictions of a company vehicle. You can choose the vehicle you wish and drive it during business and after hours.

An employer benefits by offering salary packaging as it helps to attract and retain staff. There is no need to keep company cars on the books which are a depreciating asset. There is also no need to deal with the headache of servicing, registration, insurance and upkeep of stock.

To find out more about our novated lease program speak to a Madison Finance representative on 1300 887 967.

Finding good staff and being able to retain them is often a difficult task. By offering incentives to employees, your company becomes attractive and therefore you are more likely to attract and retain staff. By offering your employees a novated lease option for their vehicle it means they can finance their car from their pre-tax income. This is a way of salary sacrifice. A novated lease can also be used as a means of financing their partner’s car, which in turn becomes financed from their pre-tax income. By saving your employees thousands of dollars in tax each year, you become an attractive means of employment.

Employees like to salary package their vehicles because it means they can use their own vehicle as a means of transport, rather than relying on a company car that is often used by other staff members. As such, the employee is able to obtain the car that they desire, rather than fitting into company guidelines. If the employee does terminate their employment they are able to retain their vehicle. They have the choice of leasing their car through their new employer (if available continuing with the repayments themselves, or offering the car to the finance company for buyback. This also proves attractive to employers as they do not need to retain cars once employees leave. This negates the need for excess company cars to be kept in stock.

As part of salary packaging a vehicle the employee may also choose to take out a fully maintained novated lease. This means that the running costs of the vehicle, such as servicing, fuel and tyres are paid for from their pre-tax income. The tax savings literally do add up. Employers are no longer required to maintain company cars as this is a huge expense on the company books. As you can see, offering salary sacrificing techniques to your employees is beneficial to both employees and employers alike.

In case you missed it in the media hype of the festive season, the last set of annual financial numbers put out by the Australian Bureau of Statistics (ABS) painted an incredible picture. They showed 2009 had been a year of excellent recovery in everything that matters. Overall, the statistics reveal the all important growth in household wealth had been the strongest for a generation. The ABS attributes most of the recovery to the lift in stock markets, house prices and super funds.

While the ABS statistics in late December contained a number of very interesting facts, one which has escaped media scrutiny is that foreign investors now account for 40 percent of Australian shares, up from 30 percent a few years ago. Clearly investors with access to cheap money have used it as part of upward pressure on values. But to keep perspective on where prices really sit, our stock market is still 30 percent below its 2007 peak.

Entering into a novated lease provides benefits for both the employer and the employee. A novated lease is a method of salary sacrificing. By financing a car through a novated lease you are paying for your vehicle from your pre-tax income. A novated lease program also provides you with the opportunity to pay for the running costs of your vehicle from your pre-tax income. Running costs include petrol, registration, servicing and insurance. Most companies will also allow you to finance your partner’s vehicle from your pre-tax income. This literally can save you thousands of dollars each year in tax.

By taking advantage of a novated lease program you have the benefit of using your own vehicle and not at the mercy of using a company car that is used by many other employees. It also alleviates the problem of moving your belongings from one vehicle to the next.

Employers are welcoming of novated lease programs because it means it is an incentive for attracting new staff and retaining existing employees. It also alleviates the need for company cars which require constant upkeep, such as insurance, registration and servicing. Company cars are a depreciating asset, which are constantly bought and sold depending on the number of employees. They also take up unnecessary car space.

To find out more about a novated lease speak to one of our friendly professional staff members. We are here to help and guide you through our novated lease program. Call us on 1300 887 967 to take advantage of this salary sacrificing method.