If you’re hoping to buy a car through a novated lease, you may be planning to have a talk with your boss. With your employer on board, you can save 10 per cent on the purchasing cost, as well as bundling your discounted running costs for better budgeting.
You may even be an employer yourself, currently scouring the web to truly understand what this thing is that you’ve been hearing about – “novated leasing?” If you’re unsure of the benefits a novated lease has for you and your business – or if you’re hoping to arm yourself with some real advantages before going to see your boss – here are five:
Many skilled professions already use a novated lease program with their current employer.
1) It’s attractive to staff
Sure, the latest Audi A4 might be a really good-looking car, but what we mean here is that it’s an attractive benefit to potential employees.
A novated lease allows an employees to choose his or her own personal car. They get to buy it at a discounted price and can save on running costs – such as registration, insurance, tyres and fuel – as well.
In return, you get the benefits that come with that, like the ability to attract skilled workers in a competitive recruitment market. What’s more, many skilled professions already use a novated lease program with their current employer. If you don’t, employees could easily be actively put off working for you as their novated lease will have to revert to a personal loan.
Employers don’t have to spend money on a novated lease.2) There is zero cost to the employer
Did we mention that novated leasing is free for employers? The lease comes with no commitment except a small time one. At Alliance Leasing, we’ve managed to streamline even this down to a quick and easy sign-up process.
3) It can lower your payroll tax liabilities
Each state has its own payroll tax obligation, which is another avenue for saving money. Say payroll at your company amounted to $2 million with 20 staff, and none of them has a novated lease; you’ll pay payroll tax on that $2 million.
Now let’s say 10 of those members of staff had novated leases, that could bring your payroll down to $1.8 million – meaning that would be your new taxable amount for payroll tax purposes.
Our research shows that in Victoria, having 20 employees who salary package the average car will save $7,025 per year, while 60 cars will cut payroll tax by $21,072. The savings are even better in NSW, with savings of $7,893 for 20 leased cars and $23,649 for 60.
If retention is on your radar, a novated lease is a great incentive for people to stay.
4) It shows faith in staff
A novated lease isn’t just for attracting employees; by giving them a tangible saving on what is likely to be the second most expensive thing they ever buy, you’re creating a strong relationship with existing ones, too. Even more than that, you’re giving them a great showing of faith.
An interesting study from Deloitte shows that half of all millennial employees (soon to be our largest working generation) will look to move jobs in the next two years. If retention is on your radar, a novated lease is a great incentive for people to stay.
5) There’s minimal admin
At Alliance, we’ve built our entire company and our novated lease procedure to be quick and hassle-free. We wouldn’t be able to do that if it was a complicated process, and we’ve managed to streamline the task of signing up an employer to two bits of paper and five minutes of time.
Every employer has their own Alliance account manager should they need someone to chat to, and unlike some companies, we don’t mess around with exit fees and other hidden costs like that.
If your boss is onboard, give us a call and we’ll show you both how easy a novated lease really is.
