genie79

Looking for some advice. I have been offered a car allowance along with my salary. I have seen that novated leases are tax effective. Can anyone tell me how a car allowance or a novated lease are tax effective.

elice_in_oz

I don't understand all the ins and outs of novated leases, but have a look at this article in today's paper. Looks like the government will be changing the rules on Tuesday. Might be good to wait until then to work out if it'll be good for you or not.

killerhales

Yes, wait until the budget as changes are anticipated.

The tax benefit is largely the fact that you pay for your novated lease from your PRE tax money. Therefore the remaining taxable amount is smaller and you end up paying less tax (may even put you in a lower bracket).

Look at www.sgfleet.com.au for more details, and they provide a calculator so you can work out if it is worth your while. I used to have both our families cars on a novated lease.

However, the current system will probably change next week