Originally Posted by navy blue
Looking a t getting the missus a new car Possibly Falcon SR as they look allright. She can lease a car thru work even thoiugh she is just a s**t kicker.....in other words (earns just under 40k). Is there benefits in leasing for here. Probably do under 25000kms a year. Thinks it is a novated lease. ne1 got any tips, information, webapges in simple languauge about leasing a caar that could hel me out here?
PS I earn 50k a year but my company will not lease cars!!!!!!!!!
There can be a benefit to your missus. The benefit could be more if you could lift the klms above 25k a year (this includes private klms).
The benefit comes from salary packaging the payments and expenses leading to a reduction in your before tax $ (thus leading to a saving in tax) and getting the expenses effectively GST-free.
The cost however is the resulting FBT (Fringe Benefits Tax), which has the effect of reducing the benefit (sometimes to nil or negative).
I assume there will be no business use, so the FBT cost will be say based on $35,000 (im not sure of the cost of the Falcon SR).
Based on more 15,000klm to 25,000klm annual klm's
$35,000 x 20% = $7,000 FBT cost
This cost her employer will (generally) require an "employee contribution", to avoid the prevailing FBT being paid by the employer which needs to be taken from AFTER tax pay.
If the klms were lifted to $25,000klm to $40,000 the FBT cost will be substantially reduced.
$35,000 x 11% = $3,850 FBT cost
The benefits (tax saved & GST) is more complicated to calculate, I suggest you find a Novated Lease calculator on the web or talk to someone who has a calculator. (Ive made up some basic calculators in excel see below 1st thread link)
I talked to Prosperion www.prosperion.com.au
and they did a calc for me and emailed me the calculation showing the overall benefit.
Its a shame, they wont salary package at your work, because you could have done an "associate lease" for your missus against your salary. Your salary being higher then your missus the tax saving (benefit) will be higher.
Companies like Prosperion exist to take the hard work out of calculating and maintaining the salary package for the employer, instead of inhouse like at the accounting firm I work for :)
If you need any help with interpreting the calculation when received, I would be happy to help.
Also a few threads I started on the subject:
Are u being ripped off by your employer?
Get a tax deduction & GST-Free for restoring your car!