Novated Lease For Government Employees
Take advantage of one of our salary packaging options to reduce your tax paid and enjoy more benefits.
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Novated Lease For Government Employees
If you’re an Australian government employee, you are eligible for a novated lease under a salary sacrifice arrangement. Although varying slightly state by state, you can assess and arrange from a variety of salary packaging options to reduce your tax paid and enjoy certain benefits.
Whether you’re applying for a NSW police novated lease, ACT Government novated lease or salary sacrifice defence arrangement, the basic process is the same. Learn more with Smartleasing below.
How does a novated lease work?
A novated lease is a type of salary package arrangement which allows employees to finance a new or used car with their pre tax salary. It is an agreement made between an employee and employer, where the employer will set aside some of your pre tax salary to finance your vehicle and any related ongoing costs.
Taking part in a novated lease will also reduce your taxable income, meaning you can pay less tax while financing a used or new car (excluding car trade ins).
Can Government novated leasing be cheaper than a car loan or cash?
Yes. By not using your savings or taking out a car loan, you could save thousands over the life of the lease.6
View the infographic below, to learn more about how novated leasing compares to other forms of finance.
Salary sacrifice as a government employee?
As an Australian government employee, you can apply for a salary sacrifice arrangement with your employer and take on a novated car lease. You’ll need to enter an arrangement suitable to you depending on the purchase price, lease term, and any additional running costs of your vehicle.
Below are a few examples of Government departments that accommodate salary sacrifice and novated lease arrangements. You can contact each department during their business hours for more independent financial advice.
NSW Health novated lease
NSW Health employees can enjoy the benefits of novated leasing with a salary sacrifice arrangement. The entire process is streamlined and accounts for each individual employee’s pay packet and vehicle running costs.
Department of Education novated lease
Department of Education employees can also arrange a Department of Education salary sacrifice car lease. Employees are automatically eligible for novated leases and can enjoy the benefits of saving on tax with car finance.
Find out how much you can save on a car with a Department of Education novated lease with our lease calculator.
Australian Defence Forces novated lease (ADF Novated Leasing)
Under a defence salary sacrifice arrangement, employees in the defence force can apply for a novated car lease. Depending on your specific conditions, you may also include car maintenance costs under the terms of your novated lease agreement and your employment.
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Disclaimer
1. The amount you will receive for your car is based on the car's value as determined via Redbook's Trade in Price and is subject to any finance that may be outstanding on the car. For full terms and conditions, speak with our leasing team.
2. Vehicle prices stated are for a 2021 Nissan X-Trail Wagon and include all NSW on-road costs and government charges, except in the case of the novated lease vehicle price which is exclusive of GST as GST is not payable on the purchase price of a vehicle financed through a novated lease (GST saving calculated on the FBT base value of the vehicle). The novated lease vehicle price includes Smartleasing’s buying power discount, which is subject to change. The negotiated Smartleasing buying power discount varies depending on the vehicle chosen and the State and Territory in which you purchase the vehicle.
3. The novated lease finance cost includes a Smartleasing administration fee of $850, which has been used for illustrative purposes only. The actual Smartleasing administration fee applicable to your novated lease may differ as it will be dependent on your employer’s salary packaging plan.
4. Running costs include insurance, registration, fuel and maintenance costs.
5. GST savings on running costs are dependent on the GST processing method nominated by your employer.
6. Residual value, also referred to as a “balloon payment”, is the payment required by the Australian Taxation Office at the end of a novated lease term. The vehicle may be sold or re-leased to payout the residual value at the end of the lease term.
7. Total cost over life, where life represents 5 years. In the case of a novated lease, the total cost over life reflects the net effect after tax. All calculations are based on the following assumptions: living in NSW 2000, salary: $70,000 gross p.a., travelling 15,000 kms p.a., and in the case of the car loan and novated lease – term: 60 months. Figures quoted include budgets for finance, fuel, servicing, tyres, maintenance, Vero by Suncorp comprehensive motor insurance and re-registration over a 60 month period (being the period of the lease/loan). Novated lease calculations: use Net GST processing method and Employee Contribution Method for FBT purposes. Interest rate used for novated lease is 7.14% p.a. vs 8.68% p.a. for car loan. Vehicle pricing and interest rates are correct as at July 2021 and are subject to change. Your actual savings will depend on your income tax bracket, the GST processing method nominated by your employer, administration fees payable under your employer's salary packaging plan and your personal circumstances.