Getting a new car using a novated lease via salary packaging is a huge benefit for workers in the public sector. And the benefit is about to get better for tens of thousands of health workers in NSW as part of changes in the first budget from the recently elected Labour Government.
Under current salary packaging arrangements, the resulting tax savings are split equally between health workers and NSW Health. This may seem strange to non-government employees but there are more options to include in salary packaging such as meals and school fees.
The announcement in the NSW Budget changes the 50/50 split to 70/30 which will deliver more savings to employees and make salary packaging a new car in a novated lease more attractive.
Increasing the benefits to employees should see an increase in promotions from the providers of novated leasing. The benefits of salary packaging a car are significant yet the penetration into eligible employers is low.
According to the government, better salary packaging is critical to recruiting, retaining, and sustaining our health workforce, as it allows employees to decrease the amount of tax payable on their income.
Changes announced by the NSW Government, will see HSU award workers’ share of these tax savings increase to 70 per cent.
More than 50,000 healthcare workers will benefit from these changes across NSW including in rural and regional NSW, including allied health, health and security assistants, administration staff, cooks, patient transport staff, paramedics, sterilisation technicians, tech assistants and telephonists.
The Government is working to achieve 100% during it’s the first term of Government and will be identifying funding and next stages after the September Budget.
Premier of NSW Chris Minns said, “This is an important announcement for the 50,000 health care workers who are set to benefit. We need to recruit and retain health staff. Removing the wages cap and improving the salary packaging arrangements for our health workers will go some way to addressing that. There’s more to do – I want to ensure the people of NSW have the essential services they rely on.”
To learn more about novated leasing and salary packaging a car, download a copy of the 2023 Car Leasing Guide.
