lorac

any contractors doing this? im in a dilemma now..dunno to opt for this or not..coz im planning to get a car, and that can be packaged to my salary to reduce tax, but from the calculations provided..

- my take home pay is less
- the car will not be mine after the lease period

anyone care to share..

kkwall36

Hi Lorac,
It really depends on circumstances.
I was offered it through my work , but I would struggle to meet the minimum mileage each month, so have opted not to take this option.
If you do a reasonable amount of miles (Sorry kms), and like the idea of having a new car every 3 years, then I expect it will work for you.
You will have the option to buy at the end of your term, or alternatively give the vehicle back and start another lease.
Again it is really down to your own situation.
Perhaps it is worth speaking to a bookkeeper/account, as they will be able to tell you the tax implications and what is is worth.
Sorry I couldn't be of more help.
Rgds,
Kenny

Deutschmaster

Check the small print of where you can buy the car from. I was interested in salary packaging a car on novated lease but you had to buy the car through a 'nominated' dealer which was more expensive than buying elsewhere. Then because it was a lease you had to pay interest (don't know how competitive it was) and there was the monthly 'service' fee for having the company 'organise' the taking of the money out of the pay cheque.

Any savings were quickly eaten.

lorac

so..i guess its not worth it, right?

quoll

FBT also kicks in to make it not worth it unless you do over 25k pa and that is a lot of distance. I had a work colleague who was so desperate to get over the 25k to avoid the FBT that she spent a fortune on hotels on weekends away - cost her more in the end probably.

Salary packaging into super is a good move though.

Hullfcfans

This is a common misconception. People who have problems are the ones who set up a salary package for a certain KM range and fail to meet the KM target. If they had set up the car right in the first place, it would still work out better for them.

There are plenty of people salary packaging vehicles effectively when they are only traveling 10,000km in a year. Because each person is unique, what works for one person will not always work for another.