Pay less tax on your current or next car? Why wouldn’t you?
We all know the drill. You get paid, the taxman takes his share and you pay your mortgage or rent, car repayment and other living expenses out of what’s leftover.
Increase your take-home pay by paying less tax
What if you could flip this around? With novated leasing you can, because this salary packaging benefit – an arrangement between you, your employer and a financier – lets you use a combination of pre- and post-tax dollars to pay for the lease repayments of a new or used car and its regular running costs.
How does this work?
With novated leasing, your car lease repayments and annual running costs are partly paid for with pre-tax salary – which means you could reduce your taxable income and potentially save on tax as well as paying less GST than if you bought that same car outright, with a bank loan, or drawing down on your mortgage.
In fact, Maxxia has delivered financial savings to 48,000 customers through novated leasing. These customers saved tax on:
- Car repayments
- Roadside assist
- Car washing
In 2019 on average, we’ve saved employees across a range of sectors each year on income tax, with total estimated maintenance savings of more than $600,000.
Say you earn $80,000. By novated leasing a car worth $25,000 for five years you could save more than $11,185 (life of lease) in income tax. And this figure doesn’t include:
- GST savings you could enjoy on the cost of the car through dealerships – and on many of the car’s running costs
- Access to our nationwide buying power, which could get you a great car deal
- The support of our team of experienced mechanics, who will save money wherever possible at service time, and help you maximise the resell value
Would you agree that paying less tax on things you’d ordinarily be paying for anyway is a smart financial choice? Get in touch today to learn more!
Things you need to know: This general information doesn't take your personal circumstances into account. Please consider whether this information is right for you before making a decision and seek professional independent tax or financial advice. Conditions and fees apply, along with credit assessment criteria for lease and loan products. The availability of benefits is subject to your employer’s approval. Maxxia may receive commissions in connection with its services. Maxxia Pty Ltd | ABN 39 082 449 036.
Novated Lease example: The estimated potential tax benefit is exclusive of GST and is based on the assumption that you would have paid for the lease from your post-tax salary (as opposed to salary packaging those payments from your pre-tax salary or a combination of your pre and post-tax salary). Payment includes: Your car payments, fuel, registration, tyres, insurance and scheduled servicing. The estimated annual benefit will vary depending upon salary, employment circumstances, selected benefits and applicable tax treatment. The example assumes you earn $80,000 a year, a 5-year lease term, an annual distance travelled of 15,000kms and a 25% residual value. The estimated annual operating costs includes estimates of fuel, maintenance, tyres, registration, comprehensive insurance and fleet management fee and are exclusive of GST. GST of 1/11th is payable on your ECM contributions. State Stamp Duty rates apply. PAYG tax rates effective 1 July 2020 have been used.
This website contains general information and doesn't take your personal circumstances into account. Seek professional independent advice before making a decision.