There are various benefits employees can enjoy if they opt for Novated Lease agreements. One of these benefits is, getting to use a leased vehicle without having to worry about making payments every month, since the employer makes the payments. The payments made towards the vehicle’s running costs are made from the employee’s pre tax salary income and these payments are made every month or at the decided time by the employer to the lease company. Another important benefit employees can enjoy is savings on income tax and Fringe Benefit Tax if they opt for a lease agreement. Employees can also save on GST that would normally be charged on incurred expenses for vehicles.
The most attractive benefit of opting for leased cars is that, employees get more choice while choosing vehicles as compared to using a standard company car. Most lease agreements, allow employee to choose the type, make and model of the car they want while opting for a lease contract. This allows employees to use their dream car for a set number of months or years. Some providers also offer another useful feature that ensures that the vehicle can be transferred to another employee when required.
Employees that opt for fully maintained Novated Lease agreements can enjoy additional benefits. The main benefit of these agreements is that, the employee only has to make one payment towards all costs of the vehicle, such as maintenance and running costs. Insurance, road side assist and other features may be offered with fully maintained Novated lease. Another benefit of such lease agreements is that, lease agreements that are fully maintained may include up to 100% finance of the purchase price of the vehicle and portability of the lease agreement. In the case of this type of lease agreement, usually the GST for the vehicle is claimed back by the finance provider on behalf of the employee to make life easier for the employee. This also lowers the amount financed to the final purchased price of the vehicle deducting GST.
It can be concluded that the benefits mentioned above are some of the many employee’s benefits of Novated lease agreements. Before opting for a lease contract with any company, employees should remember that there are three types of Novated contracts and the fully maintained lease agreement offers maximum benefits. However, the fully maintained contract usually costs the most, since this contract offers maximum benefits and minimum hassles for both the employee and the employer.