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.