Do you use your personal vehicle for work?
Unlock Tax Savings with the Novated Lease Operating Cost Method
Save up to $10,000 vs a traditional 5 year car loan
Easily convert your existing car loan to a novated lease
Flexible Visa card for fuel purchases
Get a Novated Lease Quote
"*" indicates required fields
Why Choose Our Novated Lease for Business use?
1. Tax Savings
Our Novated Lease Operating Cost Method allows you to make the most of your business vehicle. By packaging your vehicle expenses into pre-tax dollars, you can significantly reduce your taxable income and maximise your savings.
4. Budget Control
We help you budget your vehicle expenses effectively. You can accurately predict and manage your vehicle costs, avoiding unexpected financial surprises.
2. Flexible Vehicle Choices
Whether you prefer a brand-new car, a reliable used vehicle, or even your existing one, our method offers you the flexibility to choose the vehicle that suits your business needs.
5. Employee Benefits
Offer your employees a valuable perk with our Novated Lease Operating Cost Method. It's a powerful incentive that can attract and retain top talent while minimising your administrative load.
3. Streamlined Management
Say goodbye to the hassle of managing vehicle-related expenses. With our Novated Lease Operating Cost Method, we handle all the intricacies, from fuel and insurance to servicing and registration, making your business vehicle management effortless.
6. Compliance Assurance
Rest easy knowing that your novated lease is fully compliant with regulatory requirements. Our experts take care of the compliance and administrative aspects, allowing you to focus on your core business operations
Who is this for
For professionals who use their personal car for business purposes, Novated Leases, combined with the operating cost method, offer a strategic leasing solution. The more one uses their vehicle for business travel, the greater the savings. Salespeople, consultants, and real estate agents capitalise on frequent travel benefits. Medical professionals, contractors, and field engineers value it for moving between work locations. Regional managers, mining workers, educators, agricultural experts, public speakers, and researchers leverage these leases for diverse commutes, merging personal and business use with flexibility and cost-efficiency.
Operating Cost Method Novated Lease vs. Traditional Novated Lease
What’s the difference?
The primary distinction between the two methods lies in the way business use is accounted for:
The Operating Cost Method Novated Lease allows employees to use their personal car for business purposes and specify a business use percentage. This percentage indicates how much of the car’s use is for business-related activities. The higher the business use percentage, the greater the potential tax savings, making it a highly efficient option for those who use their personal vehicle substantially for work.
In contrast, the Traditional Novated Lease does not take into account the specific percentage of business use. It provides tax benefits through salary packaging but doesn’t offer the added advantage of adjusting for a business use percentage, which can lead to maximised tax savings in the Operating Cost Method.
Why Employees Love It
- Significant Tax Savings: Maximise deductions through salary packaging.
- Freedom in Vehicle Selection: Choose a car that resonates with your style.
- Hassle-Free Experience: All vehicle-related expenses are bundled for convenience.
- Flexibility: Easily transfer the lease between employers if job changes occur.
How Employers Benefit
- Reduced Administrative Burden: Minimise the hassle of fleet management.
- Attractive Employee Perk: Offer a competitive advantage in employee attraction and retention.
- No Residual Risk: Eliminate concerns about vehicle resale values.
- Financial Efficiency: Keep liabilities off the company’s balance sheet.
Business Use Novated Lease Vehicle Deals
Our Novated Lease Packages include the following;
Repayments
Fuel / Charging
Tyres
Registration
Servicing
Insurance
FAQ
What is the Novated Lease Operating Cost Method?
This method is a type of vehicle leasing arrangement where employees can lease their personal car through salary packaging. It factors in a specified business use percentage, allowing for potential tax benefits based on how much the vehicle is used for business purposes.
How does this method differ from the Traditional Novated Lease?
The primary difference is the inclusion of a business use percentage in the Operating Cost Method. This percentage signifies how much of the car's use is for business activities. The higher this percentage, the greater the potential tax savings.
Why is the business use percentage important?
The business use percentage directly impacts the potential tax savings one can achieve. A higher business use means a larger portion of the vehicle's expenses can be claimed, leading to more significant tax benefits.
What tax benefits can I expect with the Novated Lease Operating Cost Method?
Users can expect tax benefits arising from salary packaging the vehicle and its running costs. The exact savings will depend on factors like salary, car expenses, and the specified business use percentage.
Can I transfer my Novated Lease if I change jobs?
Yes, one of the advantages of the Novated Lease Operating Cost Method is its flexibility. If you change jobs, you can typically transfer the lease to your new employer.
How do employers benefit from this arrangement?
Employers can benefit in several ways, including reduced fleet management responsibilities, potential GST credits on operating costs, and the ability to offer an attractive incentive for employee attraction and retention.
Is this the same as a Business Operating Lease?
No, the Novated Lease Operating Cost Method is different from a Business Operating Lease. A Business Operating Lease is an agreement where a business leases a vehicle for a set period, after which the vehicle is returned to the lessor. In contrast, the Novated Lease Operating Cost Method is an arrangement between an employee, employer, and a leasing company, where the employee can lease their personal vehicle through salary packaging, factoring in a business use percentage for potential tax savings.
Do I own the car and who can drive it?
You are the registered and insured owner of the vehicle therefore the decision of who drives it is entirely yours!
Will FBT (Fringe Benefits Tax) apply?
Fringe Benefits Tax is offset by post contribution to eliminate any FBT. This figure is determined as part of the remaining balance, for example if you utilise a 85% business use calculation ,85% will be pre tax and 15% will be post tax.
Do I require a large income to benefit?
No, as long as you pay tax, you will benefit.
What happens at the end of the term?
- Upgrade your vehicle
- Extend your current package for another term
- Payout the remaining residual
Can I lease a used car with the Novated Lease Operating Cost Method?
Yes, you can lease a used car using this method. However, the specific terms and conditions might vary based the age or condition of the used vehicle. It's essential to check with your us for the exact requirements and potential limitations.
Can I switch from a car loan to the Novated Lease Operating Cost Method?
It is possible to switch from a car loan to a Novated Lease. The specifics will depend on the terms of your current loan, any early repayment fees, and the agreement with your leasing provider. Consulting with Positive Salary Packaging will give you a clear picture of the steps involved and any associated costs.
Experience the Benefits Today
Discover how our Novated Lease Operating Cost Method can enhance your business operations, boost employee satisfaction, and drive substantial tax savings. Take the first step towards a smarter approach to business vehicle management. Contact us now to get started. Your business deserves the advantages of a Novated Lease Operating Cost Method tailored to your needs.
All novated examples are based on 60 months term traveling 20,000kms per annum based upon a $120,000 annual income and being used for 80% business use. Images are for display and illustration purposes only.
Vehicle supply is subject to availability and pricing may change subject to manufacture discretion and could affect the estimated figures list above. Novated leasing or Vehicle Packaging works for the employee by substituting a taxable benefit compared to their current personal scenario. The above figures represent the estimated net impact on your income taking into account the assumed tax and GST savings. All applications are subject to normal credit criteria and assessment along with loan suitability. Terms, conditions, fees and charges may apply. It is best to seek financial advice from an independent specialist in regards to your own personal circumstances before solely relying on these figures. Positive Salary Packaging ABN 71 643 583 171