The following example demonstrates the financial advantage of salary packaging a Novated Lease vehicle within your FBT Exempt Cap (ie. the limit of benefits you can package Fringe Benefits Tax free). The vehicle itself utilises a portion of your FBT Exempt Cap limit, while all vehicle operating costs are included in your salary package tax-free and do not contribute towards your Cap usage.

Assumptions:

• Gross Annual Salary: $60,000
• Vehicle Base Value: $30,000 (excluding on-road costs)
• Lease Term: 3 years
• Annual Vehicle Lease & Operating Costs: $13,000
• Travelling between 0 – 14,999kms per FBT Year (statutory percentage of 20%)

	Not Salary Packaging	Salary Packaging (within FBT Exempt Cap)
Gross Salary	$60,000	$60,000
Less
Vehicle Lease & Running Costs	$0	$13,000
Fringe Benefits Tax	$0	$0
Plus
Input Tax Credits (GST refund on expenses)	$0	$1,182
Gross Salary after Packaging	$60,000	$48,182
Less
PAYG Income Tax (incl. Medicare Levy)	$11,947	$7,929
Net Salary After Tax	$48,053	$40,253
Less After Tax Costs
Unpackaged Vehicle - Lease & Running Costs	$13,000	$0
Net Disposable Income	$35,053	$40,253
Net Annual Savings	$0	$5,200
Term of Lease Saving	$0	$15,600

Summary
Total FBT Exempt Cap	= $30,000 grossed up value
Cap Used by Novated Lease	= $12,389 grossed up value
Cap Remaining	= $17,611 grossed up value
Maximum Real Dollar Equivalent	= $9,422 real dollars available towards other fringe benefits

Assumptions:

• Gross Annual Salary: $60,000
• Vehicle Base Value: $30,000 (excluding on-road costs)
• Lease Term: 3 years
• Annual Vehicle Lease & Operating Costs: $15,000
• Travelling between 15,000 – 24,999kms per FBT Year (statutory percentage of 20%)

	Not Salary Packaging	Salary Packaging (with FBT)
Gross Salary	$60,000	$60,000
Less
Vehicle Lease & Running Costs	$0	$15,000
Fringe Benefits Tax	$0	$0
Plus
Input Tax Credits (GST refund on expenses)	$0	$1,364
Gross Salary after Packaging	$60,000	$46,364
Less
PAYG Income Tax (incl. Medicare Levy)	$11,947	$7,311
Net Salary After Tax	$48,053	$39,053
Less After Tax Costs
Unpackaged Vehicle - Lease & Running Costs	$15,000	$0
Net Disposable Income	$33,053	$39,053
Net Annual Savings	$0	$6,000
Term of Lease Saving	$0	$18,000

Summary
Total FBT Exempt Cap	= $30,000 grossed up value
Cap Used by Novated Lease	= $12,389 grossed up value
Cap Remaining	= $17,611 grossed up value
Maximum Real Dollar Equivalent	= $9,422 real dollars available towards other fringe benefits

Assumptions:

• Gross Annual Salary: $60,000
• Vehicle Base Value: $30,000 (excluding on-road costs)
• Lease Term: 3 years
• Annual Vehicle Lease & Operating Costs: $17,000
• Travelling between 25,000 – 40,000kms per FBT Year (statutory percentage of 17%)

	Not Salary Packaging	Salary Packaging (with FBT)
Gross Salary	$60,000	$60,000
Less
Vehicle Lease & Running Costs	$0	$17,000
Fringe Benefits Tax	$0	$0
Plus
Input Tax Credits (GST refund on expenses)	$0	$1,545
Gross Salary after Packaging	$60,000	$44,545
Less
PAYG Income Tax (incl. Medicare Levy)	$11,947	$6,692
Net Salary After Tax	$48,053	$37,853
Less After Tax Costs
Unpackaged Vehicle - Lease & Running Costs	$17,000	$0
Net Disposable Income	$31,053	$37,853
Net Annual Savings	$0	$6,800
Term of Lease Saving	$0	$20,400

Summary
Total FBT Exempt Cap	= $30,000 grossed up value
Cap Used by Novated Lease	= $10,530 grossed up value
Cap Remaining	= $19,470 grossed up value
Maximum Real Dollar Equivalent	= $10,416 real dollars available towards other fringe benefits

Assumptions:

• Gross Annual Salary: $60,000
• Vehicle Base Value: $30,000 (excluding on-road costs)
• Lease Term: 3 years
• Annual Vehicle Lease & Operating Costs: $19,000
• Travelling 40,001kms or more per FBT Year (statutory percentage of 13%)

	Not Salary Packaging	Salary Packaging (with FBT)
Gross Salary	$60,000	$60,000
Less
Vehicle Lease & Running Costs	$0	$19,000
Fringe Benefits Tax	$0	$0
Plus
Input Tax Credits (GST refund on expenses)	$0	$1,727
Gross Salary after Packaging	$60,000	$42,727
Less
PAYG Income Tax (incl. Medicare Levy)	$11,947	$6,074
Net Salary After Tax	$48,053	$36,653
Less After Tax Costs
Unpackaged Vehicle - Lease & Running Costs	$19,000	$0
Net Disposable Income	$29,053	$36,653
Net Annual Savings	$0	$7,600
Term of Lease Saving	$0	$22,800

Summary
Total FBT Exempt Cap	= $30,000 grossed up value
Cap Used by Novated Lease	= $8,052 grossed up value
Cap Remaining	= $21,948 grossed up value
Maximum Real Dollar Equivalent	= $11,742 real dollars available towards other fringe benefits

Assumptions:

• Gross Annual Salary: $60,000
• Southgate Everyday Purchases Card : $16,049 per year (entire FBT Exempt Cap)

	Not Salary Packaging	Salary Packaging (within FBT Exempt Cap)
Gross Salary	$60,000	$60,000
Less
Southgate Everyday Purchases Card	$0	$16,049
Fringe Benefits Tax	$0	$0
Gross Salary after Packaging	$60,000	$43,931
Less
PAYG Income Tax (incl. Medicare Levy)	$11,947	$6,490
Net Salary After Tax	$48,053	$37,361
Less After Tax Costs
Unpackaged Expense Payments	$16,049	$0
Net Disposable Income	$32,004	$37,461
Net Annual Savings	$0	$5,457

The table below demonstrates the potential tax savings that you may achieve by salary packaging your whole FBT Exempt Cap ($16,049 per year) towards a Full FBT fringe benefit type (eg. the Southgate Expense Payment Card, mortgage, etc) within each Income Tax Bracket. The calculations are based on the assumption that your taxable income will remain within the same marginal Income Tax bracket after salary packaging deductions.

Annual Salary (after salary)	$6,000 - $37,000	$37,001 - $80,000	$80,001 - $180,000	$180,000+
Net Annual Saving	$3,290	$5,457	$6,179	$7,463

Assumptions:

• Gross Annual Salary: $60,000
• Southgate Everyday Purchases Card : $16,049 per year (entire FBT Exempt Cap)
• Meal & Accommodation Card: $2,000 per year (FBT-free and uncapped)

	Not Salary Packaging	Salary Packaging (within FBT Exempt Cap)
Gross Salary	$60,000	$60,000
Less
Southgate Everyday Purchases Card	$0	$16,049
Meal & Accommodation Card	$0	$2,000
Fringe Benefits Tax	$0	$0
Gross Salary after Packaging	$60,000	$41,951
Less
PAYG Income Tax (incl. Medicare Levy)	$11,947	$5,810
Net Salary After Tax	$48,053	$36,141
Less After Tax Costs
Unpackaged Expense Payments	$16,049	$0
Unpackaged Meal Expenses	$2,000	$0
Net Disposable Income	$30,004	$36,141
Net Annual Savings	$0	$6,137

This example demonstrates the additional tax savings that can be achieved by salary packaging a Meal & Accommodation Card (FBT-free and uncapped) where you have already used your entire FBT Exempt Cap towards other fringe benefits.

Meal Entertainment is specifically FBT-free and is not reportable on your Group Certificate or Payment Summary. Therefore, it can be packaged in addition to your FBT Exempt Cap to maximise your overall tax savings, without incurring any FBT liability.

Assumptions:

• Gross Annual Salary: $60,000
• Vehicle Base Value: $30,000
• Lease Term: 3 years
• Annual Vehicle Lease & Operating Costs: $13,000
• Travelling between 0 - 14,999kms per FBT Year (statutory percentage of 20%)
• Southgate Everyday Purchases Card: $9,422 per year

	Not Salary Packaging	Salary Packaging (with FBT)
Gross Salary	$60,000	$60,000
Less
Vehicle Lease & Running Costs	$0	$13,000
Southgate Everyday Purchases Card	$0	$9,422
Fringe Benefits Tax	$0	$0
Plus
Input Tax Credits (GST refund on expenses)	$0	$1,182
Gross Salary after Packaging	$60,000	$38,760
Less
PAYG Income Tax (incl. Medicare Levy)	$11,947	$4,725
Net Salary After Tax	$48,053	$34,035
Less After Tax Costs
Unpackaged Vehicle - Lease & Running Costs	$13,000	$0
Unpackaged Expense Payments	$9,422	$0
Net Disposable Income	$25,631	$34,035
Net Annual Savings	$0	$8,404

Concessionally taxed benefits (such as a Novated Lease vehicle) will provide a greater tax saving and consume less of your FBT Exempt Cap per dollar packaged than Full FBT benefits (eg. mortgage, credit card). Therefore, is it generally more tax effective to package a combination of a Novated Lease and Full FBT benefits within your Cap limit, you to increase and maximise your tax savings achieved.

Assumptions:

• Gross Annual Salary: $60,000
• Laptop Cost: $2,200 including GST

	Not Salary Packaging	Salary Packaging
Gross Salary	$60,000	$60,000
Less
Laptop Computer	$0	$2,200
Fringe Benefits Tax	$0	$0
Plus
Input Tax Credits (GST refund on expenses)	$0	$200
Gross Salary after Packaging	$60,000	$58,000
Less
PAYG Income Tax (incl. Medicare Levy)	$11,947	$11,267
Net Salary After Tax	$48,053	$46,733
Less After Tax Costs
Laptop Computer	$2,200	$0
Net Disposable Income	$45,853	$46,733
Net Annual Savings	$0	$880

Effective Cost = $2,200 - $880 tax saving = $1,320 (equivalent to 40% price discount)

Income Range	$18,201 - $37,000	$37,001 - $80,000	$80,001 - $180,000	More than $180,000
Annual Expense	Tax Savings	Tax Savings	Tax Savings	Tax Savings
$1,100	$305	$440	$485	$565
$2,200	$610	$880	$970	$1,130
$3,300	$915	$1,320	$1,455	$1,695
$4,400	$1,220	$1,760	$1,940	$2,260
$5,500	$1,525	$2,200	$2,425	$2,825

The table below outlines the estimated Income Tax savings you may achieve by salary packaging different annual amounts towards the Meal & Accommodation Card, for each Income Tax bracket. The calculations are based on the assumption that your taxable income will remain within the same marginal Income Tax bracket after the payment of your meal entertainment expenses. Income level should be based on the reduced income after deducting all other salary packaged fringe benefits.

Income Range	$18,201 - $37,000	$37,001 - $80,000	$80,001 - $180,000	More than $180,000
Annual Expense	Tax Savings	Tax Savings	Tax Savings	Tax Savings
$1,000	$205	$340	$385	$465
$2,000	$410	$680	$770	$930
$3,000	$615	$1,020	$1,155	$1,395
$4,000	$820	$1,360	$1,540	$1,860
$5,000	$1,025	$1,700	$1,925	$2,325
$6,000	$1,230	$2,040	$2,310	$2,790
$7,000	$1,435	$2,380	$2,695	$3,255
$8,000	$1,640	$2,720	$3,080	$3,720
$9,000	$1,845	$3,060	$3,465	$4,185
$10,000	$2,050	$3,400	$3,850	$4,650

Meal Entertainment is specifically FBT-free and is not reportable on your Group Certificate or Payment Summary. Therefore, it can be packaged in addition to your FBT Exempt Cap to maximise your overall tax savings, without incurring any FBT liability.