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_seanp83(Newbie)Newbie
15 Apr 2021

Hi

I have a Novated Lease (vehicle) with a pre and post tax contribution.

I also have just taken a promotion - as part of this I am offered a vehicle that I am required to salary sacrifice toward. Is there somewhere I can enter in the figures to see the impact on my take home salary - to find out if there are any tax (FBT or otherwise) implications?

I just want to make an informed decision prior to signing paperwork on an additional vehicleZ

With Thanks

Sean

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2,471 views
3 replies

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RichATO(Community Support)Community Support
ATO Certified Response17 Apr 2021

Hi @seanp83

Congratulations on your promotion! You must be very pleased.

With a salary packaged car you should ask your employer how it works, i.e.

    • Who owns the car?
    • What are the salary packaged (i.e. your payments) payments actually paying?
    • Over what term?

    It's likely that your employer is leasing a car for you and they are paying for the lease from your pre-income salary.

    In this way they are providing you with a fringe benefit and so they will pay FBT on the taxable amount of the benefit.

    If they are doing this on say a 3 year lease plan and then you have an option to own the car through a lump sum payment then it's worth finding that out too and comparing those costs with what it would cost you to buy your own equivalent car.

    To have a look at the numbers I'd suggest ask your employer which salary packaging company they use and then go online and use their salary packaging calculator to compare your take home income for different scenarios.

    I hope that helps.

    RichATO

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    Most helpful replyATO Certified Response

    RichATO(Community Support)Community Support
    ATO Certified Response17 Apr 2021

    Hi @seanp83

    Congratulations on your promotion! You must be very pleased.

    With a salary packaged car you should ask your employer how it works, i.e.

      • Who owns the car?
      • What are the salary packaged (i.e. your payments) payments actually paying?
      • Over what term?

      It's likely that your employer is leasing a car for you and they are paying for the lease from your pre-income salary.

      In this way they are providing you with a fringe benefit and so they will pay FBT on the taxable amount of the benefit.

      If they are doing this on say a 3 year lease plan and then you have an option to own the car through a lump sum payment then it's worth finding that out too and comparing those costs with what it would cost you to buy your own equivalent car.

      To have a look at the numbers I'd suggest ask your employer which salary packaging company they use and then go online and use their salary packaging calculator to compare your take home income for different scenarios.

      I hope that helps.

      RichATO

      _seanp83(Newbie)Newbie
      17 Apr 2021

      Hi @RichATO

      They own the car (and I have no ownership rights) so what I pay contributes toward the fuel, rego, insurance etc as I am able to use it (unrestricted).

      My main concern is have the work vehicle (pre-tax amount) plus my novated lease amount. (Eg - how it impacts my take home) and how to work it out to see this impact.

      cheers. Sean

      AriATO(Community Support)Community Support
      20 Apr 2021

      Hi @seanp83

      We (the ATO) don't have a calculator online but if you use google (or similar) to search one you'll get hits for different companies/organisations and their calculators you can access.

      Ari

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