Nowadays, employees have the smart choice to increase the value of their corporate remuneration and to derive the benefit and use of driving a vehicle without having to go in for an outright purchase. Novated leasing is fast becoming a popular option for people who want to use a car but do not have the resources to purchase one outright. Employees in Australia are readily adopting different kinds of salary packaging methods to enhance the value of their earnings and to decrease the taxes applicable on their income. Novated leasing is one of their preferred ways to procure an vehicle of their choice as a part of their salary package.
Salary Packaging
Salary packaging is the benefit given to employees, in which they can opt to receive part of their salary in the form of a product or service, in exchange of a monthly amount of money. This amount of money is deducted straight from their monthly salary and is eligible as a tax exemption as the amount left after deduction is the amount that is taxable. This enables employees to enjoy the services of products like cars or laptops without making a straight up purchase, decreasing their tax at the same time and maximizing their take-home salary.
Novated Leasing
Novated leasing is a popular format of leasing cars in which an employer can help an employee lease a car for a preset period and to enjoy its services while deducting the rental and running costs associated with the car from their pay check. This way, employees can add this component into their pay package, to allow for lease payments and claim tax benefits for the same. Novated leasing also carries a number of important benefits both for the employee and the employer, which makes it an extremely popular option for corporate entities at present.