It’s a bold headline for any article, but a novated lease could help you fill up your car for less than 99c per litre. Here’s the math, I promise not to lose any of you regardless of your math or tax knowledge.
You fill up your car on Tuesday afternoon, you put 60 litres of unleaded fuel in for $1.50 per litre including GST. In total, the bill comes to $90.00 and you drive off on the way home or off to kids sport or some other activity.
When you have a Novated lease through Positive Salary Packaging the process is no different. You still pull into the petrol station on Tuesday afternoon and fill up with 60 litres. But here is the difference between the two. On the novation you received a GST advantage. So on 1.50$ purchase price you save 14c per litre, it’s more significant than a reward card through your shopping! On top of this you now get to pay for your fuel using pretax income, given that most employees have a marginal tax rate of 32.5c per dollar an employee earning $68,000 per year could save up to 44c per litre.
So let’s put the numbers together, you normally pay $1.50, you get a 14c gst saving, then a 44c discount due to the pre tax benefit. In total it comes to 92c and your tank now only costs $55.20 to fill, that’s a $34.80 difference.
So if you want to start filling up for less and start putting your income to work for you, it might be time to talk to Positive Salary Packaging. You can novate a new vehicle, a used vehicle or even take your existing loan and turn it into novation to get hold of the associate savings.
If you want to drive your income further, speak to the team at Positive Salary Packaging about how you can turn petrol into pre tax expenditure and drive your income further.