Novated Leasing Through Salary Sacrifice
A novated lease is a three-way agreement between you, your employer, and a finance company that allows you to lease a vehicle using your pre-tax salary. Frontline Car Loans helps Perth employees set up novated leases that reduce taxable income and bundle all running costs into a single convenient payment. We compare options from over 30 lenders to secure the best rate for your situation.
What Is a Novated Lease?
A novated lease works through salary sacrifice. Your employer agrees to make your car lease payments directly from your gross (pre-tax) salary. This means you pay for your car before income tax is calculated, which effectively reduces the amount of tax you pay. The lease covers the vehicle cost and can also include all running expenses such as fuel, insurance, registration, maintenance, and tyres.
The word “novated” refers to the novation — a legal process where your employer takes on the obligation to make the lease payments on your behalf. If you change jobs, the lease can transfer to your new employer or revert to you personally.
Benefits of a Novated Lease
Reduce your taxable income: Because lease payments come from your pre-tax salary, your taxable income is reduced. This means you pay less income tax, which can result in significant savings depending on your tax bracket.
GST savings on the purchase price: When you acquire a vehicle through a novated lease, you do not pay GST on the purchase price. On a $50,000 car, this saves you approximately $4,545 from the outset.
Bundle all running costs: A fully maintained novated lease packages fuel, insurance, registration, servicing, tyres, and roadside assist into your regular payments. You have one simple deduction from your pay and no surprise car bills.
Choose any car: Unlike a company car scheme, a novated lease lets you choose the vehicle you want — new or used — from any dealer or private seller.
No ABN required: A novated lease is available to employees. You do not need to run a business or hold an ABN. You just need a willing employer, and most employers in Australia offer salary sacrifice options.
How a Novated Lease Works
Step 1: Choose the car you want to drive. New or used, any make or model.
Step 2: Frontline Car Loans arranges the lease with a competitive lender from our panel. We negotiate the best interest rate and structure the lease to maximise your tax benefit.
Step 3: Your employer signs the novation agreement, agreeing to deduct lease payments from your pre-tax salary.
Step 4: You drive your car and enjoy lower tax and bundled running costs. At the end of the lease term you can purchase the vehicle outright, re-lease it, or upgrade to a new car.
Who Is Eligible for a Novated Lease?
Any employee whose employer offers salary sacrifice arrangements can apply for a novated lease. This includes full-time, part-time, and contract workers. Most medium to large employers in Perth and across Australia already have novated lease policies in place. If you are unsure whether your employer participates, we can help you find out.
Get a Novated Lease Quote
Find out how much you could save with a novated lease. Call Frontline Car Loans on 1300 857 130 or request a free quick quote online. Our team will calculate your potential tax savings and help you choose the best lease structure for your circumstances.