Getting your employees on a novated car lease

How it works

The novated lease can offer huge savings for employees, but best of all it’s simple for employers to set up (with almost no paperwork), and it’ll cost you nothing out of pocket. To quickly understand how it works and get set up: this is your cheat sheet. Remember: Your employees will thank (and possibly even love) you for it.

Novated lease benefits: A recap

Before we tackle how it works, some quick facts:

1. A novated lease is a simple benefit to offer your team that can save them thousands. One way to look at it is that it’s like giving them a pay rise without it costing you anything, as they can access significant tax savings.

2. Given these savings, and the benefit to employees on their highest expense (after accommodation), novated leasing can be a valuable asset in your staff retention program and ‘employer of choice’ initiatives.

3. It’s completely cost neutral for you.

4. It’s easy to set up (see the next section).

Employer responsibilities

1. You need to pay the agreed salary sacrifice amounts in your regular pay cycle (we’ll give you these amounts to enter into your accounting software, and it’s ‘set and forget’).

2. You’ll need to account for any FBT liability, however, again, we’ll be able to guide you here and provide a solution resulting in $0 FBT liability.

And that’s it. You aren’t responsible for the leases themselves, and if a member of your staff who has a novated lease leaves for any reason, your obligation to make payments ends at that time. There are no ongoing obligations once their employment has ended.

If you choose us as your novated lease provider and get stuck at any time, you’ll have a dedicated account manager that you can contact for fast help. 

For employers: The process with a novated lease

1. Onboarding

   It’s super simple to set up novated leasing. With us, there’s bare minimum paperwork – you only need to sign a one-page novation agreement (which simply says that you’ll make payments on your employee’s behalf while they’re employed with you), and an invoice confirming the amount you will pay.
   

2. Employee setup

   For each employee, we’ll provide you with the pre-tax and post-tax deductions to enter in your payroll system (e.g. MYOB, Xero, etc). You simply enter this and you’re done.
   

3. Payment options

   You can send us payments on your employee’s behalf via direct debit or EFT, and this can be set on the same date the pay cycle happens, for simplicity. If you choose direct debit, you only need to sign the usual direct debit terms and conditions. That’s it.

If you’re an employer hoping to offer novated leasing to your team, we can walk you through each step of the process and stay with you throughout the journey. If you have any questions, just give us a call on 1300 888 594. Or you can request a callback or send us a message and we’ll message you back.