A Novated Lease is a triadic agreement between an employee, employer and financier,
whereby the employer agrees to facilitate periodic payments for equipment
through a salary sacrifice, during the employee's term of employment with the said
organisation.
The Novated Lease forms part of the employee's salary package. When
the employment agreement is terminated, the Novated Lease agreement is repudiated
and payments become the responsibility of the employee.
| Key Advantages: |
| 1. |
Novated Leases provide an advantage to employees as payments deducted via
salary sacrifice are on a pre-tax basis.
|
| 2. |
Budget stability. A fixed monthly payment installment allows for more accurate
expense forecasting, as well as hedging against inflation for an employee.
|
| 3. |
The employee may have the ability to transfer (novate) the lease to a new
employer.
|
| 4. |
Fast and easy finance approval.
|
| 5. |
No down payments are normally required. |
* As employment agreements can vary depending on the employer, independent
taxation advice is recommended to confirm the advantages to the employee.
|
