Novated Leasing

At Sheridan and Associates we offer to either create a cash flow prior to the establishment of a Novated Lease and/or help with the paperwork to implement the Novated Lease for you directly with the Salary Packaging company.

How it Works

A Novated Lease is a three way agreement between you, your employer and a finance company or fleet company. Then by way of a Novation Agreement your lease is Novated to your employer, who then undertakes to meet the lease rentals whilst you are employed by that organisation.

Fringe Benefits Tax (FBT) is a tax payable by employers who provide non-cash benefits to employees. A Novated Lease is a non-cash benefit that attracts FBT. Some employers pass the cost of the FBT onto employees through salary sacrifice.

Employee Contribution Method (ECM)

Employee contributions can be used to reduce or remove the amount of FBT you pay. ECM allows you to pay some or all, of your vehicle costs from after tax dollars. Allowable vehicle costs include finance lease rental, fuel, maintenance, registration and insurance associated with your Novated Lease. Any such contribution payment can reduce the FBT Taxable Value of the vehicle and therefore the FBT liability payable. You may be able to reduce the FBT liability to zero by paying for allowable car costs up to the FBT Taxable Value of the car with after tax income.

Information, advice and services related to Salary Packaging is provided by Sheridan & Associates independently of Infocus Securities Australia Pty Ltd which is not responsible for provision of this Information, advice or services.

Want more information on Novated Leasing? Contact us today.