Novated Lease
0 – 14,999kms per year
(Packaged within FBT Exempt Cap)
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
|
Novated Lease
15,000 – 24,999kms per FBT year
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
|
Novated Lease
25,000 – 40,000kms per FBT year
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
|
Novated Lease
40,001kms or more per FBT year
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
|
Full FBT Benefit (eg. Everyday Purchases Card, Mortgage)
(Packaged within FBT Exempt Cap)
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
|
Full FBT Benefit (within Cap)
AND Meal Entertainment (in addition to Cap)
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.
Novated Lease AND Full FBT Benefit
(Packaged within FBT Exempt Cap)
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.
Laptop Computer*
Assumptions:
- Gross Annual Salary: $60,000
- Laptop Cost: $2,200 including GST
*Greater than 50% business use is required to salary
package this benefit as FBT exempt.
|
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)
|
The table below shows the Income Tax savings you can achieve when purchasing a laptop
computer at various prices, for each Income Tax bracket.
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
|
Meal & Accommodation Card
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.