Novated Leasing



What is a novated lease?

 

A novated lease is great way to pay for your car and its running expenses. It’s a three way agreement between yourself, a financier and your employer.

You agree to pay for the cost of the car and agreed expenses, such as petrol, car maintenance and insurance with a combination of your pre-tax or post-tax dollars.

Your company leases the car back to you for the duration of your agreement.

This normally provides you with income tax savings and is an excellent way to enjoy driving your car.

 

 

Can I choose my own car?

 

Absolutely! That’s the beauty of a novated lease. You’re not locked into a particular type of car, make or model. In most circumstances you can choose the car that bests suits your needs.

 

 

Can I novate a used car?

 

Many people don’t realise that you can enjoy the benefits of a novated lease without having to buy a new car. It’s entirely up to you. You can opt for:

  • a used car
  • a “sale and lease-back” option for your existing car; or
  • a great value new car with our nationwide buying power.

We can go through the options available to you in more detail when you call us to discuss your situation.

 

 

What is a Fringe Benefits Tax? (FBT)

 

Fringe Benefits Tax is a tax on the benefits your employer provides you with that are not in the form of cash salary or wages. Under federal legislation, benefits provided by your employer are not subject to PAYG tax, but FBT may be payable on the benefit.

For a car, the amount of FBT payable depends on its purchase price, how many days your car was available for travel and your actual kilometres travelled during the 12 months from 1 April through to 31 March of the following year.

When you do the sums – and we will help you with this – you will find in most cases your net benefit is higher than the amount of FBT payable.

 

 

Why do I have to tell you my odometer readings?

 

Lodging your odometer reading in  October, January and April each FBT year lets us monitor if you're on track to meet your nominated annual kilometres. To make this easy for you, we send you a reminder letter before each deadline with instructions on how to lodge your reading.

 

 

How do I know if I am on track with FBT?

 

We have a handy FBT tracker on this website. Just login at the top left of this page and enter your User ID and Password then follow the prompts to check if you are on target to meet your nominated kilometres.

If you have forgotten your User ID and Password you will find the details in your Welcome Kit or go to the login section on this website and select 'Forgotten Password' and the system will reset a password for you.

 

 

What if I am not driving enough kilometres as planned?

 

If you have lodged your quarterly odometer readings, we send you an email or letter to explain how to increase your pre-tax payments, so you don’t incur an FBT liability.

 

 

What is the Employee Contribution Method (ECM)?

 

If you make a post tax contribution towards your car you can reduce the FBT payable to NIL. Any post tax contribution is known as the Employee Contribution Method (ECM).

 

 

How do I pay for my registration?

 

When you receive your renewal notice for registration and compulsory third party (CTP) insurance, you can pay in one of two ways:

  • We can pay on your behalf: If you have more than two weeks to renew your registration/CTP, send us a copy of the renewal notice with a signed Reimbursement/Payment claim form and we will pay the amount directly to the relevant authority from your novated lease account. If you have run out of claim forms, you can download a copy from our website or ring us and we will send you extra copies. We suggest you file these in your Welcome Kit for future reference.

    This applies to all states and territories except NSW. If you live in NSW, we will send you a cheque so you can make payment by the due date.
  • Pay directly and we'll reimburse you: If you have less than two weeks to renew your registration/CTP, please pay the relevant authority directly. You can then claim reimbursement by sending us a signed Reimbursement/Payment claim form and a copy of your renewal notice and receipt. This is provided you have sufficient funds in your novated lease account at the time.

What is not included in my novated lease?

 

We don’t include road tolls, traffic infringements or accessories fitted to the car after it is purchased.

 

 

What happens if I leave my employer?

 

Give us a call straight away and we’ll explain the choices available to you when you leave your employer.

You can choose to:

  • Pay the amount owing on the car to the financier and own it outright
  • Transfer the novated lease to your new employer (subject to your new employer’s approval).
  • Continue paying for the lease and running costs with your own money.

We also reconcile your account so that you don’t have any remaining FBT liability or outstanding payments.

After you leave, if you haven’t made contact with us, your former employer will stop making any contributions to your novated lease account to pay for your lease and running costs. Your fuel cards will be cancelled and you become the ‘lessee’ of the car and are solely responsible to the financier for making all the remaining payments.

 

 

How do I find out more?

 

Call Maxxia’s Customer Care Centre on 1300 123 123 between 8.00am – 7.00pm EST or email us at mycar@maxxia.com.au. We’re happy to help you.