Here are a few examples to help you understand how a novated lease lets you save. We compare annual costs of a novated lease to paying for the same car with 100% after-tax salary.
See the reduction in taxable income and tax payable, plus the mix of pre-tax and post-tax contributions that eliminate any FBT liability. Same car, same price, big savings with our novated options.
NOTE: ECM (mix of pre and post-tax) benefits all except +$180k salaries. Examples do not factor in other pre-tax impacts (e.g. childcare payments, benefits, etc.)
Submit your enquiry here and our team will be in touch with you shortly.
Budgeting superstarYou appreciate the certainty of a budget. You probably have multiple bank accounts dedicated to different expenses or use an app to track your spending. You seek to avoid budget surprises.How we help: With a novated lease, your motoring expenses are smoothed into one set regular payment deducted from your salary, so you’ll only have one predictable amount to budget for. Watch our short ‘budgeting made easy’ video to find out more. |
To show how a novated lease provides significant savings, we have created a comparison using two employees – Mark and Jenny. They both earn $110,000 a year and plan to buy a new 2021 Ford Ranger DBL PU XLT 2.0 4X4 at the recommended driveaway price of $65,766 (including GST). They are both using a four-year term and drive about 25,000 km per year.
Mark is buying the car as a private individual so he has to pay the GST on the car (10%). He will finance the GST inclusive cost, $65,766. Mark also pays the GST on his running costs (insurance, fuel and maintenance).
| Finance | $13,459 |
| Insurance & roadside | $1829 |
| Registration | $800 |
| Fuel | $4347 |
| Maintenance | $2131 |
Total annual costs | $22,567 |
Gross annual taxable income | $110,000 |
Less pre-tax deduction | - |
Taxable income | $110,000 |
Less tax | $28,417 |
Net annual income | $81,583 |
Less post tax deduction | $22,567 |
Mark's disposable income, after tax and car | $59,016 |
| Finance | $10,448 |
| Insurance & roadside | $1663 |
| Registration | $800 |
| Fuel | $3885 |
| Maintenance | $1937 |
Total annual costs | $18,938 |
Gross annual taxable income | $110,000 |
Less pre-tax deduction | $9,199 |
Taxable income | $100,801 |
Less tax | $25,244 |
Net annual income | $75,558 |
Less post tax deduction | $10,713 |
Jenny's disposable income,after tax and car | $64,845 |
Novated lease comparison based on 2021-2022 income tax rates. The examples given within this material are provided for your information and to illustrate scenarios. The results should not be taken as a substitute for independent professional taxation and financial advice. For the purposes of this example we have not taken into account the impact of salary sacrificing gross salary for fringe benefits on the calculation of your superannuation guarantee contributions. This calculation also does not take into account the impact of any tax offset such as the lower and middle income tax offset to which you may be entitled to. All reasonable care has been taken in preparing these materials; however, SG Fleet provides no warranties and makes no representation that the information provided is appropriate for your particular circumstances or indicates you should follow a particular course of action.