When you hear the term salary packaging, it usually means your company is offering you a way to get your car financed through a scheme called novated leasing.
Don’t be put off by the term. Novated just means that one party to a contract is substituted for another. Put simply, it means the company you work for agrees to pay the lease and take the money out of your salary. Doing it this way reduces the amount of tax you pay.
Novated leasing is a legal tax deduction available to any employee
More and more employers are offering it; more and more employees are taking it up. The sales pitch says everyone can save money with a novated lease.
And in most cases it’s true, but you need to take the time and do some research first. The savings come from a combination of reduced taxable income (this is a key part you need to understand), buying power and GST input tax credits being claimed by the financier.
The best way to learn more is to Google “novated leasing”. From a quick search you’ll find some simple tools and explanations to answer all your questions. If you still have questions talk to someone in human resources. They should be able to point you in the right direction.
