Plug

Hello Folks,

I'm looking for advice from someone who is utilising a salary packaged novated lease for a car purchase. I'm currently looking into this and am a tad confused by how FBT is applied. I've had a quote for a new car ($32,000) and estimated 20,000kms per year for a 3 yr lease. The monthy costs (which is what I'm really interested in) of the lease is around $650 - that includes fuel, maintenance, rego......great, BUT then you have to consider the FBT which I know breaks between 24,999 and 25,000kms/yr. I'm still unable to get a straight answer on what you actually have to pay (or put by) monthly. I reckon on around $200-300 which makes novated leasing much less attractive IMHO.

Any advice appreciated from those currently running a lease or are in 'the know'. I'm aware of the residual payment that will need to be payed, just totally confused on the FBT.....thanks.

Plug

Bump - help......

jond

I have a novated lease for roughly the same amount and sorry I can't help you either

John

NKSK version 2

I’ve tried looking into this and to be honest have hit a brick wall. The whole thing is so complex and the benefits seemingly minimal (if any at all) that I’ve just given up.

Amazulu

I used to lease in the UK. It's easy to do, good value and the tax breaks are good. I would not lease here as it's not good value and very complicated.

Plug

Hey John,

Is you Fringe Benefit Tax included in your monthly payment or do you expect a tax bill come July?

Alan Collett

FBT is payable by employers in Australia, not by employees; there is no equivalent to the UK's benefit in kind legislation in Australia.

Best regards.

jond

You beat me to it.

I had just confirmed this with someone from work, honest

Plug

Hi Alan,

Thanks for the feedback, it appears there are a couple of methods of taxation for novated lease. I had a quote which included an Employee Contribution Method which bumps the lease costs up but gives you more of a tax insentive (some how...). This is made up of a pre and post tax contribution (still not sure if this comes back if you do the ks required....). The other method is statutory fraction, apparently less attractive. I'm thinking I may need to see a tax accountant before making my decision. it did seem fairly straight forward from the outset.