As your employer offers salary packaging a Novated Lease is an excellent option.

A Novated Lease is a 3-way arrangement between the employee, the employer and the financier where the oligations
under the finance lease are transferred from the employee to the employer through a Deed of Novation, and the employer
assumes responsibility for making the lease payments to the financier.

The Deed of Novation remains in force until the earlier of the end of the lease term, or until the employee ceases
employment.

Fully Maintained Novated Lease

A Fully Maintained Novated Lease is an arrangement where the all of the operating costs (such as lease rental, servicing
and maintenance, registration, tyres and insurance) of the motor vehicle are covered by a single monthly payment made
by the lessee to the leasing company. The leasing company takes care of all maintenance and administration costs of the
motor vehicle.

Under a Non-Maintained Novated Lease the lessee is responsible for all maintenance and other running costs of the motor
vehicle.

Flexibility of a Novated Lease

There are a number of benefits associated with novated leases, including:

• The employee can lease the motor vehicle of their choice.
• The motor vehicle can be leased where the private use of the vehicle is 100%.
• When an employee ceases employment, the responsibility for the lease reverts back to the employee.
• The motor vehicle does not appear on the employer's Balance Sheet.

Tax Benefits of a Novated Lease

The concept of novated leasing is central to salary packaging arrangements between an employee and an employer.
Under a salary packaging arrangement, an employee agrees to forego a portion of their salary or wages in return for
benefits equal to that amount.

For a novated lease, the lease and running costs of the motor vehicle, and fringe benefits tax (if applicable) are
deducted from the employee's pre-tax salary, and PAYG is calculated on the reduced salary or wages.

The tax benefit of a novated lease arises from the concessional fringe benefits tax treatment on the car, with the lease
and running costs being FBT exempt. Depending on the employee's individual financial circumstances, salary packaging
a motor vehicle under a novated lease can have the effect of increasing an employee's net disposal income.

Other Benefits of a Novated Lease

Other benefits of a Novated Lease include:

• The repayments are fixed over the term of the loan.
• The term of the novated lease ranges from 12 months to 60 months.
• As the financier is the owner of the motor vehicle, they claim the GST on the purchase price, meaning that the
  employee finances the GST-exclusive amount.
• Under a salary packaging arrangement, the employer is entitled to claim an input tax credit for the GST components
  of the lease payments and other running costs of the motor vehicle.
• If the employer passes back to the employee the input tax credits, the employee is effectively paying the novated
  lease and running costs net of GST.