Is Novated Lease Worth It in 2022 and How Does It Work?

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Is Novated Lease Worth It in 2022 and How Does It
Work?
If you are looking for a car in the market, then
you may be considering various finance options
like taking a personal loan or something else.
But have you heard about Novated lease? In
todays blog, well share information on Novated
lease, how does it work, is novated car lease
worth it, and the benefits of a novated
lease. What is Novated Lease?
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A novated lease is a type of salary packaging
that assists you to finance a new, existing, or
used car while serving various advantages and tax
savings. Novated lease is also known as a salary
sacrifice car. How does Novated Lease
Work? Basically, it is a three-way agreement that
would be between you, your employer, and the
finance company. You can ask your employer if
they can agree to make lease payments on a car by
using your pre-tax salary. If they agree on this,
then you can take out the lease with the finance
company. At that point, it will be up to your
employers responsibility to make the lease
repayments to the finance company directly on
your behalf. With a novated lease, you are not
restricted to any specific car type or model,
unless agreed by your employer. In most cases,
you can select any car you want to lease,
irrespective of whether its a new, your existing
car, or even a used car.
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• One of the best things about the novated lease is
  that your repayments are partially sourced from
  your before-tax income, and as a result, you need
  to pay less tax and have little more net
  profit. Novated lease benefits you in many ways.
• Some amount is taken from your before-tax
  income
• A novated lease enables your employer to take the
  amount directly from your pay to make payments
  for your car and its running cost. Some amount is
  used before you are taxed on it. It can minimise
  your taxable income, and maximise disposable
  income.
• Some amount is taken from your after-tax
  income
• FBT, which stands for Fringe Benefits Tax is a
  tax that is used for benefits you get from your
  employer, but it is not in the cash salary or
  wages form. However, to assist offset any FBT you
  may be subject to pay on your novated lease, your
  deductions can include an amount of your post-tax
  salary.

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• Making a budget for your cars running costs
• The budget convenience of having your cars
  running costs distributed over a year is
  considered one of the best factors of novated
  leasing. If you pay annually, then it means 26
  payroll deductions cover your car payments along
  with costs such as
• Registration
• Maintenance
• Servicing
• Insurance
• Carwashes
• Tyres
• Fuel
• If you pay on weekly basis, then the costs will
  be spread out more than 52
• pay runs and on monthly basis, it will be 12 pay
  runs. Before the start of the
• lease, you can predict your annual running costs
  for your car, and this cost is
• deducted from your pay over the life of your
  lease.

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• Saves Time
• Most often, you may ask are novated leases worth
  it? Well, with the help of novated lease, you
  can save time that you may usually invest in
  looking for a car and bargaining with a car
  salesman.
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• Save Money
• With the novated lease, you dont need to pay GST
  on the purchasing cost of a new car. It may save
  you thousands upfront that you may otherwise have
  to pay. Hence, if you are looking for an answer
  to the question is novated lease worth it in
  2022? then its answer depends on various
  circumstances as it offers possible income tax
  and GST savings.
• Get a Fuel Card
• A novated lease comes with several advantages,
  such as you will get a fuel card. One of the best
  reasons why a novated lease is worth it, apart
  from the amazing tax benefits, is that it offers
  an effective method of managing all your
  car-related expenses at once.

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Another advantage of having a fuel card as a part
of your novated lease is you can track fuel usage
over the year. This is good for employers and
employees and can be utilised to minimise
expenses and further save money. At the end of
the novated lease, you can consider various
points, such as You can upgrade the car model to
the latest model. You are able to extend your
current novated lease. If you want to keep the
car that you have been leasing, then you can. You
can also sell your leased car and use the amount
from the sale to make payment for the residual
value. Summing Up Novated lease can be a complex
task for you, but if you work with a reliable
firm, like Reliable Melbourne Accountants, we can
manage these complexities for you. If you dont
know when is a novated lease worth it, then you
must know that it depends on different
circumstances because in many cases, it offers
GST and income tax savings.
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If you are not aware of novated leases, then our
team of professionals can assist you with this.
You can rely on our services as we have served
several customers with our services.
CONTACT US
Website- https//rmelbourneaccountants.com.au/ A
ddress- 1/3 Westside Avenue Port Melbourne VIC
3207 Australia Email- enquiry_at_rmelbourneaccount
ants.com.au Mobile- 1300 049 534