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Novated Lease
Novated Lease is a lease between the financier and an
individual employee. The employee and their employer then
enter into an agreement called the Deed of Novation.
Novated Lease is the most common form of salary packaging a car.
Under the Novation Agreement, the employer pays lease rentals
(as well as running costs and FBT) on behalf of the employee.
The employer then recoups these expenses from the employee's
salary package. This reduces the employee's cash salary and
hence their income tax liability. The benefit to the employee
is that by paying all vehicle costs from their pre-tax income
they end up with more tax dollars after accounting for vehicle
expenses.
Call us on (03) 9888 9292 and we will be happy to discuss your options with you.
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