Novated Lease For Employers

How do employers benefit from offering a Novated Lease?

• Add Salary Value - By allowing Novated Leasing, you are giving your staff access to using their pre-tax salary. This reduces their taxable income and saves them money and in some cases, the savings can be thousands of dollars. So its like giving your employees a pay rise that you don't have to pay for!
• Attractive Staff Incentive - By offering a Novated Lease as a part of an Employee's package, Employers are better able to attract and retain the best staff.
• Reductions In Taxable Income Related Expenses - By allowing a Novated Lease, you can potentially reduce the company's payroll tax and work cover premiums.
• Reduce Vehicle Responsibility - Unlike a company car, the responsibility of the Novated Lease stays with the employee even in the event they leave your employment.
• Its free - A Novated Lease shouldn't cost you anything if set up correctly.

How does the Novated Lease work?

In order for a Novated Lease to be set up, two agreements need to be put in place. The first is a finance lease between the employee and financier taken out in the Employee's name. This is the car loan component of the VIP lease. The second is a novation agreement which is entered into by the financier, employee and employer to initiate the lease. This enables the Novated Lease costs to be invoiced to the employer and deducted tax effectively from the employee's salary.

The Novated Lease costs are worked out over the duration of the lease and divided into equal monthly payments. These payments are recovered by the employer from the employee's salary and a portion of the GST from the ATO.

Platinum Direct Finance take care of all the associated paperwork and provide a detailed Payroll Advice detailing the payroll deductions specific to each lease.

What happens if the employee leaves?

Your employee's Novated Lease is fully portable, so if they leave, the Novated Lease leaves with them. Ensure that their final pay is held until the running cost budget reconciliation is received, as there may be a deficit to recover from their final pay.

What happens if the employee is overspending on the running budgets?

If a significant variance is forming in the budgeted running costs the employee will be asked to recalculate their lease to modify the deficiency.

Why use Platinum Direct Finance?

The Platinum Direct Finance group of companies will finance over 800 million dollars worth of equipment and car finance this year! Due to this volume and buying power, we can give our clients access to the best finance rates and financing products across Australia.

Need further information?

If you require further financing assistance, either complete our friendly enquiry form or call an experienced finance consultant on 1300 554 553.

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