Novated Leasing an FBT Exempt EV
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GST Credit of up to $5,885.55 off the EV
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100% of the finance and running costs are salary sacrificed PRE TAX
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FBT Exempt means $0 FBT liability for the employee and employer
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GST credits on the finance
and running costs
Example of how the savings work
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The below example is based on the Tesla Model 3 RWD.
It clearly demonstrates how the PRE TAX lease payments and running costs reduce your taxable income, thereby reducing the amount of tax payroll deduct. The tax saving offsets a large chunk of the overall finance and running costs.
Monthly costs and savings
PRE TAX finance & running costs $1,401pm
Income Tax reduction $485pm
Change in take home pay is only $916pm
Annualised savings
Annual GST saving $1,681 pa
Annual tax saving $5,820 pa
Annual GST and tax saving $7,501
Savings over 4 year term
GST and tax saving over 4 year term $30,004
Tax savings will be even higher for employers in a higher tax bracket
The GST and income tax saving covers about 35% -45% (depending on your income tax bracket) of the finance and running costs. The Government is serious about increasing EV sales and they have literally made it too good to refuse.
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EV Novation organise absolutely everything
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EV Novation is not a vehicle dealership or general finance company. EV Novation are a full service Novated Leasing company specialising in;
Sourcing FBT Exempt EVs for our clients
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Setting up the Lease and Novation Agreements
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Liaising with your payroll department to set up ongoing PRE TAX salary deductions
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Managing and paying your EV finance and running costs
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Providing an online reporting portal to track actual expenses against budget and much more
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Providing a fuel card (if applicable ie PHEV that still uses some fuel)
What is a Finance Lease?
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The Finance Lease agreement (arranged by EV Novation) is between the employee and financier. The Finance Lease covers the monthly repayments and residual applicable to the vehicle purchase and does not encompass the running costs.
Employee
Finance Lease
Financier
What is a Novation Agreement?
The Novation Agreement is a separate document that converts your Finance Lease into a Novated Lease and allows your employer to deduct the costs via salary packaging.
The Novation Agreement is arranged by EV Novation and is between the employee, employer and financier.
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If an employee changes employers, it is possible to transfer the arrangement if your new employer signs a novation agreement, allowing you to continue saving GST and tax.
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Employee
Employer
Novation Agreement
Financier
How are running costs managed?
EV Novation manage the running costs via our state of the art fleet management system.
Each month payroll send your PRE TAX funds to EV Novation to cover your lease and running costs. Those funds are deposited to your individual vehicle fund.
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EV Novation pay the financier every month from your vehicle fund.
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EV Novation also pays your running costs (can include insurance, rego, servicing, tyres and fuel) from your vehicle fund as they fall due.
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You can view your deposits made into your vehicle fund, detailed expenses paid from your vehicle fund and the current balance 24/7 via EV Novation's online reporting portal.