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Novated Lease

Supplier: Finlease (Australia)

Great for employer and employee.

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A novated lease is typically used to finance motor vehicles. It is an agreement between the employee, employer and a financier. The employee owns the vehicle so is able to take it to the next job.

Advantages and applications
With a novated lease, the repayment of the loan is solely the responsibility of the employee. It offers salary sacrificing advantages reducing the employee’s overall tax.

There is no up front lump sum or deposit required, though there will be a residual or balloon payment. Finance terms are typically around three to five years.

  • Cars and all types of luxury vehicles
  • SUVs and minivans
  • Trucks, utes and vans

Tax benefits
For the employee, a novated lease allows the employee acquire a motor vehicle using before tax dollars. The FBT liablity is calculated based on a number of factors available on the ATO website.

Novated leases allow an employer to reduce the payroll, therefore reducing payroll tax if applicable.

Please note that Finlease service Australian customers only.

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