Managing your car expenses while lowering your tax burden is now easier than ever, thanks to the Novated Lease FBT Exemption. Whether you're upgrading to a new car or looking for smarter car finance solutions, novated leasing offers significant financial benefits, particularly with the recent Fringe Benefits Tax (FBT) exemptions for electric vehicles.
In this blog, we’ll explore how a novated lease works, the advantages of the FBT exemption, and why it’s a top choice for both employees and employers.
A novated lease is a three-way financial arrangement between you, your employer, and a leasing company. It allows you to finance a car using pre-tax income, effectively reducing your taxable income. This arrangement also simplifies car ownership by bundling all related costs—like fuel, insurance, registration, and maintenance—into a single payment.
The Novated Lease FBT Exemption applies to certain eligible vehicles, particularly electric vehicles (EVs) and plug-in hybrids. Under this exemption:
This initiative aligns with Australia’s push for sustainability, encouraging individuals to adopt environmentally friendly vehicle options while enjoying attractive tax benefits.
Tax Savings
By using pre-tax income for vehicle payments, you lower your taxable income. The FBT exemption amplifies these savings by eliminating additional tax burdens for qualifying vehicles.
Affordable Access to EVs
Electric vehicles are now more accessible, thanks to reduced costs under the FBT exemption. This means you can drive an eco-friendly car without breaking the bank.
Simplified Car Finance Solutions
A novated lease simplifies budgeting by consolidating all car-related expenses into a single, predictable payment.
Employer Benefits
Employers enjoy cost savings and the opportunity to offer a valuable perk to employees without additional tax obligations.