Question: Do you have to be working full-time for vehicle salary packaging?
Put simply: No, you can be casual, part-time or full-time.
However, there are a few more things to think about…
Firstly, who is Andrew Pantelis?
With many years of experience in the novated leasing and vehicle finance industry, Andrew has helped many clients at Positive Salary Packaging get into new cars for less. Find out more about Andrew by getting in contact.
But back to working full-time for vehicle salary packaging
“The requirement is that your employer offers a vehicle salary packaging (or novated leasing) program.” Explains Andrew.
He continues, “basically, if you’re paying income tax and your employer offers it, you can benefit. However, it’s quite rare that casual employees will opt for the program. This is often because of their employment contracts.”
Is there a minimal amount of time needed with an employer?
“This can get a little tricky sometimes. In the traditional car loan world, you’ll typically need a minimum of three months with an employer or be off probation – that can be six months in some cases.” Says Andrew.
“The beauty with salary packaging is that it’s more of a case-by-case situation. As the vehicle salary packaging agreements require a lender, borrower and employer to sign, the minimum amount of time needed with an employer is often the employer’s decision.”
As Andrew explains, it’s not so much the lender’s decision, “You employer is part of the agreement so they’ll often only offer programs after a certain amount of time with them. The best bet is to check with your employer or, it’s likely stated in your contract.”
“Furthermore, when people have an additional casual job as a second source of income, things can get complicated. If you’re not sure, talk to your employer or give us a Positive a call to discuss things.” He adds.
Is there anything else to be aware of when it comes to casual or part-time employment?
“Yep, you should be aware of the tax-free threshold.”
As Andrew is quick to point out, “The tax-free threshold is $18,200 per year. This means that people earning this amount of less don’t pay income tax. Also, incomes under $21,655 do not attract the Medicare levy.”
“Sometimes casual or part-time employees can fall into this category. If this is the case, vehicle salary packaging benefits could be impacted. Remember, if it’s your second job, you start paying tax from $1 (no tax free threshold). so even if your income in $15,000 for your second job, you could still save on tax.”
When asked ‘how do I work out if vehicle salary packaging is right for me?’, Andrew had this to say;
“Well, vehicle salary packaging is not an off-the-shelf product so it’s important to seek professional advice and, of course, crunch the numbers.”
“More often than not, salary packaging is going to be beneficial in some way, it’s just a matter of tailoring programs to suit individual needs and circumstances.” He explains.
The next step
To see if you and your situation can benefit from vehicle salary packaging / novated leasing, get in contact with Andrew and the Positive Salary Packaging team today.
Other Q&A with Andrew Pantelis that might help
What’s the difference between novated leasing and salary packaging?
Stay tuned for more Q&A with Andrew Pantelis as he answers your questions and clears the confusion around salary packaging.