ACT health salary packaging: Vehicle Salary Packaging For Government Employees
Staff should seek independent financial advice prior to ACT health salary packaging options, especially if items that attract full Fringe Benefit Tax (FBT), such as mortgage repayments and non-work-based childcare expenses.
Vehicle salary packaging (commonly referred to as novated lease) is available exclusively to government employees and can save them thousands in taxes and FBT by reducing taxable income and eliminating FBT.
Benefits
Government employees in Western Australia (WA), New South Wales (NSW), Queensland (QLD), South Australia (SA) and the Northern Territory are eligible for salary packaging of various benefits, including motor vehicle expenses.
Salary packaging allows you and your employer to agree upon a way for you to pay for specific items with pre-tax income instead of PAYG-taxed income, potentially saving on tax while increasing disposable income.
ACT health salary packaging options (novated lease) are one of the most sought-after salary packaging arrangements. This three-party agreement between you, your employer, and a financier entails all regular car payments, such as fuel costs, servicing fees, registration and maintenance, in one easy payment plan. Furthermore, salary packaging offers both convenience and potential tax savings; however, it should be noted that certain expenses attract Fringe Benefits Tax (FBT), making them unsuitable for salary packaging arrangements such as mortgage repayments or non-work related entertainment.
Taxes
With the recent introduction of an FBT exemption for electric vehicles, many employees are considering salary packaging an environmentally-friendly vehicle through a novated lease arrangement. Unfortunately, however, terms like salary packaging and novated lease are often used interchangeably, confusing one form of salary packaging arrangement may involve both terms being used together – meaning novated lease arrangements could be one component.
Salary package providers sometimes advertise that they can offer fleet discounts unavailable to individual buyers. However, these discounts often are no greater than those negotiated directly with dealerships and may even be reduced as a result of adding on finance company margins and administrative fees.
Residual value should be one of your key considerations when choosing a novated lease agreement, as this amount will be due upon expiration. Your vehicle quote should provide information regarding this payment schedule.
Insurance
ACT health salary packaging options are an ATO-approved process that enables government employees to pay for various expenses with pre-tax salary, which can lower an employee’s taxable income, save car operating costs and increase take-home pay. Specifics of salary packaging vary by state; however, the basic principles remain similar.
Vehicles, mobile phones, laptops and tablets can all be packaged under salary packaging plans; additional expenses such as self-education or professional development expenses may also qualify for salary packaging. Unfortunately, items subject to full Fringe Benefits Tax rates, such as mortgage repayments and nonwork-based childcare, do not fall into this category.
Your salary packaging your new car through a novated lease could save thousands. At Fleet Network, our national buying power and expertise enable us to secure great deals on vehicles and then pass these savings along to you through our Smartleasing discount program.
Maintenance
Salary packaging allows you to include both the purchase price and running costs of a vehicle (fuel, maintenance, insurance and registration) within your salary package. Depending on your role, vehicle salary packaging could help save money both upfront and ongoing when owning privately owned cars.
Salary packaging is available to all continuing staff, such as casual or fixed-term staff members, academic visitors or students.
The costs associated with running a car are covered under the novated lease, including rego, insurance and fuel. However, employees will still have to pay for other maintenance costs such as tyres, oil and servicing. These can be claimed as tax deductions in the same way as other work-related expenses, such as uniforms and tools.
Many people are under the impression that you need to travel a certain number of kilometres each year to benefit from salary packaging your vehicle. It is false since changes to the FBT laws in 2011 have removed the minimum kilometre requirement. Novated leases now create significant tax savings regardless of the distance you drive.