Yes! Novated leasing and salary packaging provide a significant benefit to employees which should be embraced by employers of all sizes as a way to attract and retain staff.
According to National Automotive Leasing and Salary Packaging Association (NALSPA) chief executive Rohan Martin, they are seeing employers of all sizes realise that novated leasing and salary packaging is a way to provide a benefit to employees.
“Every employer is able to offer novated leasing as part of their employee benefit package,” explains Martin. “And we’ve seen as the war for talent has increased over the last couple of years, more employers of all sizes, are looking for ways to increase their employee value proposition.”
“Employers are asking, “how do I provide greater incentive, or reward, for my people?”, and they’re looking to salary packaging, and novated, leasing, as a way of increasing their offer, or the benefits they’re able to provide or provide to employees. Novated leasing is really a key instrument in many employer’s value proposition.”
There are no real roadblocks for small businesses to offer novated leasing to their employers. Most providers can interface with XERO and MYOB to make the payments and reconciliations seamless for the payroll and HR staff.
Employees may initially look for information internally to explain the benefits. To avoid getting bogged down in detailed explanations and financial calculations, employees can be referred to the novated lease provider, or seek independent reference material similar to the Fleet News Group annual Car Leasing Guide.
“Traditionally, we’ve seen Novated leasing fit more with probably medium to larger type of enterprises, ” confirms Martin.
“But now we’re seeing (off the back of the FBT exemption) there is broader interest from a very wide cross section of employers. From smaller employers right through to larger ones. We also see that it has been for many years popular with charitable organisations, non-profit and also government sectors where it continues to play a really critical role in the employee value proposition.”
Novated leasing can also help employers manage grey fleet risk by giving employees the opportunity to access late model vehicles are well maintained with records of registration and insurance.
If employees are driving their personal vehicles for work trips, no matter how short or infrequent, it becomes a grey fleet vehicle and the business has a responsibility to ensure it’s safe, recently serviced and registered.
“There’s a benefit in newer vehicles as novated leases, whether they be EVs or otherwise, they are clearly more fuel efficient; and, they’re safer,” says Martin.
“Everyday we’re seeing more technology and safety being employed by OEMs into vehicles. So, through Novated leasing, those vehicles become more cost effective and safer for employees.”
“Employees (with novated leasing) can get into a more fuel efficient, safer vehicle, potentially, than what they otherwise would. And we’re also seeing the emergence of more affordable brands such as BYD and MG, which are particularly popular with the healthcare and charity sectors that NALSPA members typically service.”