Electric vehicle (EV) and plug-in hybrid EV (PHEV) adoption is set to explode thanks to the Federal Government’s introduction of no Fringe Benefits Tax (FBT) on eligible models through a novated lease. This will save employees, on average, $9k per year.
With a novated lease, you salary package the car and its running costs, so they are deducted from your pre-tax income each pay cycle. This includes all vehicle insurance, registration renewals and fuel. For more information about the EV novated lease offers, check this out.
No FBT
The FBT exemption for EVs and PHEVs means your employees can save thousands annually by salary packaging their new car through a novated lease.
EVs produce no exhaust emissions and have lower running costs, making them an eco-friendly choice for novated leasing. This is a crucial reason Australia’s EV market is rapidly expanding.
With the EV FBT exemption, 100% of your novated lease payment is deducted from your pre-tax salary, meaning you can save even more on your EV novated lease. The savings will be even more significant when combined with government incentives like the $5,000 EV Battery Grant and low-cost electricity discounts.
However, it’s important to note that EVs still have a range of other costs, such as registration, insurance and maintenance, which are not covered by the novated lease but can be claimed through the FBT offset. This is the only way to maximise your EV novated lease savings.
No Tax
EVs also have the advantage of not being subject to Luxury Car Tax when financed through a novated lease. This is because the lease payment can be structured to include all of the vehicle’s running costs (fuel, electricity, registration, tyres and servicing) as a single payment collected in part or whole from salary, optimising your tax savings. For more information about the EV novated lease offers, check this out.
This can make a novated lease much more affordable than purchasing an EV outright. It’s excellent news for those on higher incomes who would generally pay a lot of fringe benefits tax if they bought an EV outright.
The EV novated lease option is available to most employees through their employer and is an excellent way for businesses to encourage the adoption of greener vehicles. It’s not surprising that more and more companies are taking up this opportunity to reduce their environmental impact and save money on fleet costs. Western Health is one such organisation, partnering with Maxxia to provide its staff with EVs through a novated lease.
No Insurance
Unlike purchasing a car with a novated lease, the finance and running costs like registration, insurance, fuel, tyres, maintenance, and roadside assistance can all be included in one monthly payment. This bundles all these expenses into a low fixed cost, which can be less than if you were paying them individually.
The first year’s comprehensive car insurance can also be financed with a novated lease. This takes the pressure off employees having to find the money upfront to cover the first year’s premium. For more information about the EV novated lease offers, check this out.
For businesses looking to attract and retain staff, offering EV novated leasing is an easy way to allow employees to embrace the future of driving. Combining government incentives, tax benefits, and reduced running costs is an innovative, sustainable choice for any organisation. FinanceBeagle can assist with setting up a new leasing program for your company. Contact our team of specialists for more information. We can help you decide if an electric vehicle novated lease is right for your business.
No Maintenance
The EV novated lease market is expanding with new and exciting models being released. These additions are designed to be more advanced and offer the latest technology.
Leasing is a more flexible option than buying a vehicle, but it can still be restrictive regarding driving limits and end-of-lease penalties. In addition, a lease will usually require the installation of an EV charging station at home or work, and it may be necessary to upgrade your electrical system.
Despite these restrictions, a novated lease on an eligible EV or PHEV can be a great way to drive a new vehicle while maximising your take-home pay and doing your bit for the environment.