1. Do I need to earn a certain amount to benefit?

If you pay tax and you drive a vehicle, you could potentially save money.

2. Do I need to travel a certain amount to benefit?

The previous FBT system (pre-2013) required travel brackets to be met, nowadays regardless of the amount of travel you do, you could benefit.

3. What vehicles are eligible?

  • New vehicles
  • Used vehicle
  • Privately sold vehicle
  • Existing vehicles under a finance arrangement
  • Existing vehicles owned outright ( sale and leaseback )
  • Vehicles sold at auction

4. What happens if I leave my job?

The agreement is fully portable between Employers, if you decide to cease work altogether then you can continue the arrangement personally, without the packaging.

5. Do I pay FBT?

No, an ECM or post tax contribution is used to offset FBT, to ensure that you don’t receive a liability.

6. Do I pay GST?

If you decide to purchase a new or used vehicle from a dealership or business, the transaction is exempt from GST. Saving you an additional 10% of the initial purchase price of the vehicle.

7. What happens at the end?

  • Trade your vehicle and upgrade
  • Sell your vehicle
  • Re-Package the residual for another term to continue benefiting and reducing the end-of-term amount
  • Payout the residual and obtain full ownership

*If the vehicle is sold or traded, profits above the residual figure are yours to keep, tax-free.10% of the initial purchase price of the vehicle.

8. What is a residual / Balloon payment?

This is the amount that the vehicle is paid down to over the term. In line with the ATO regulations and depreciation estimates, this fully transparent amount is set from the start. Many clients consider the residual as an “optional deposit payable at the end” ensuring they aren’t depositing their own funds at the start (which is lost in depreciation) and also having access to these funds, if required throughout the term. For the client who would prefer to not have the end of term liability, Positive Salary Packaging has pioneered a residual-free option, whereby additional deductions can be made to ensure there is a $0 balance at the end of the term.

9. How do I pay for expenses?

Positive Salary Packaging provides you with a fuel card, which is accepted at 94% of Australian fuel outlets. Registration, Insurance, services, and tyres can be paid by Positive Salary Packaging directly or paid by the client and claimed via reimbursement.

10. How do I track my money and make changes to my package?

Positive Salary Packaging has an online portal available to clients. Similar to internet banking, the portal will provide you with all the transaction information along with existing budgets and available balances. As the only fixed portion within the agreement is the finance component. Any running costs amendments can be made at any time, free of charge either over the phone or via the portal.

11. What happens to any unspent provisions?

Any funds within the account remain yours. If you wish to withdraw a surplus amount, this can be made via a payroll reversal, any withdrawal is subject to PAYG tax. These funds roll over year to year and can be put towards a new agreement if/when you upgrade your vehicle in the future.

12. How does this compare to bank / dealer finance?

With both the initial and ongoing GST savings as well as the income tax savings directly reducing the costs of buying and maintaining your vehicle, in many cases it could work out less than paying cash for a vehicle. When financing via alternative methods i.e. a car loan or other means, all of the above benefits cannot be obtained for your privately registered vehicle.

13. What do I do if my current employer doesn’t offer salary packaging options?

We can help set this up for you. Simply speak to your HR or Payroll manager to confirm they are willing to set up or open to discussing in more detail and we can arrange a time for our Sales and Operations Manager to contact them. Key facts to let them know are: It doesn’t cost your employer anything, all FBT reporting is completed for them, deductions are paid on invoice each paycycle via a payroll deduction similar to extra superannuation contributions and they will have their own account manager to contact as needed.

Vehicle Salary Packaging Solutions

See what Positive Salary Packaging can do for you today. Simply hit the button and send us an enquiry to get started.

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