If you are an employee seeking tax benefits, a novated lease may be a smart way to finance your vehicle. And if you are an employer, a novated lease can be a simple, cost-effective way to add value via your employee benefits program.

Put simply, it’s an agreement between the employee, employer and the financier that allows employees to lease a motor vehicle from their pre-tax salary.

Running costs and Fringe Benefits Tax (FBT) can also be paid pre-tax and registration, insurance and on-road costs can be included as part of the package. Therefore the employer pays the lease rentals direct to the financier. There are tax benefits to all parties under a novated motor vehicle lease.

Features of a novated lease may include:

• Flexibility with your choice of vehicle
• Fixed repayments and interest rates
• Possible tax benefits even though your vehicle is used for private purposes