Novated Lease
Salary packaging is becoming the benefit of choice for many employees. More and more companies are making it a centrepiece
of their attraction strategy, but the concept still remains vague for some managers.
It takes more than just a good working environment and higher salaries to attrack and retain good people. Companies wanting
to become employers of choice are quickly discovering that they have to offer a range of benefits to stay competitive. Getting a Novated Lease is growing
in popularity among jobseekers and is becoming an important element in the strategy to attract the best staff.
We believe it is nearly impossible for businesses to attract employees without having salary packaging in place. "It's because employees want to maximise their taxable income and a novated lease allows the employee to do this. Its like getting a payrise which your employer doesnt pay for".
A novated lease is a remuneration structure where employees choose to forego a portion of their salary in order to receive taxation benefits of similar value from their employers. This is in form of a car which is to be paid out of the employees' pre-tax salary.
In the past, a novated lease was the sole domain of top executives in white-collar jobs. It has worked its way down the corporate ladder and a lot of employers now offer salary packaging to all staff who can afford it.
Pros and Cons
Employees reap the benefits of a novated lease through significantly increased disposable income, while employers are rewarded
with staff loyalty and increased retention. 
When structured correctly, a novated lease allows companies to increase employee's spending power without increasing direct costs. For example, with company cars under a novated lease, employers are able to hand the responsibility for the vehicle back to the employee when the employee leaves. The result is that the company is not left with an idle or unwanted car, and the employee gets to keep a well serviced car. (fully maintained novated lease)
Some employers don't go into salary packaging arrangements because they perceive it's too difficult as there are a lot of technical tax issues that you have to understand. Employers who only have a limited number of employees think it's too hard and don't want to enter into a novated lease arrangement. One of the reasons could be the general lack of understanding of the workings of a novated lease. Maybe organisations simply don't recognise benefits, both for the employer and their employees. There is also a general misconception in terms of how the agreement is going to work, especially for organisations whose priority is centred on the bottom line. Improving productivity and balance sheet performance and at the same time reducing costs are taking up most managers time. Many departments are not looking to take on an additional workload without fully appreciating what the full gamut of benefits are for employers and employees.
This is where we can take all the hassels out of novated leasing for both the employer and employee, with their companies state of the art, fully automated systems and programs, all the employer has to worry about, is paying the lease. We can offer employers information that is not available anywhere else. They have spent years developing strategies that can save the employee thousands.
|
|