How salary packaging a car works
Normally you pay for a car with money that has already been taxed. Salary packaging flips that. Through a novated lease, your employer pays the car and its running costs from your salary, and part of that comes out before income tax. Less taxable income means less tax, so the car costs you less.
Where the saving comes from
- Pre-tax salary. Part of the lease is paid before income tax, lowering what you are taxed on.
- GST off the car. You do not pay GST on the purchase price, up to the claimable cap.
- GST off running costs. Fuel or charging, servicing, tyres and insurance are packaged GST-effective too.
- FBT exempt on an EV. Eligible electric cars carry no fringe benefits tax, the biggest saving of all.
What it costs, in the open
Here is where we differ. Most providers salary package your car and keep their margin hidden in the interest rate. We charge one flat $1,500 fee, show the true effective rate, and price any add-ons at cost plus a flat 10 percent. Every number is on your quote before you commit. See yours in the calculator.
Common questions
What does it mean to salary package a car?
It means your employer pays for the car and its running costs out of your salary, with part of it taken before income tax. That lowers your taxable income, so the same car costs you less from your take home pay.
Is salary packaging a car the same as a novated lease?
A novated lease is the arrangement that makes salary packaging a car possible. The lease is novated to your employer, who deducts it from your pay. So when people say salary packaging a car, they almost always mean a novated lease.
Do I need my employer to offer it?
Your employer needs to agree to the salary deductions, which most will. It is a one time sign off, not an ongoing burden for them. If novated leasing is not set up where you work, we help you get it across the line.
What can I package besides the car?
The running costs: fuel or charging, insurance, servicing, tyres, registration and management. They are bundled into the one pre-tax payment, so your whole cost of driving is packaged, not just the car.