Novated Leases

Easily manage Salary Packaged Vehicles with Custom Fleet Novated Leases. Novated Leases within a fleet of 20+ comes with Full Fleet Management Services include FBT reporting.

Our Novated Leases allow complete out-sourcing of vehicles included in a salary package by:

  • dealing directly with employees
  • providing cost-to-package Novated Leases quoting
  • Novated Leases reporting to employee and employer
  • single monthly Novated Leases bill to payroll 

Novated Leases Explained

Novated Leases are a three-way agreement between the employee, the employer and Custom Fleet. The basic principles of Custom Fleet Novated Leases are:

  1. The employee leases the vehicle directly from Custom Fleet
  2. The employee, employer and Custom Fleet sign a Novated Leases Agreement
  3. The employer is responsible for all agreed vehicle expenses deducted from the employee’s pre-tax salary.

Novated Leases Options

Custom Fleet offer Novated Leases drivers the following options:

Fully Maintained Operating Lease – a low risk lease which includes all maintenance, servicing and a fuel card. The future residual value risk remains with Custom Fleet.

Fully Maintained Finance Lease – includes all maintenance, servicing and a fuel card. The disclosed residual value risk remains with the lessee.

Budgeted Finance Lease – includes a fuel card and a budget for maintenance and servicing that is reconciled at lease end.   The disclosed residual value risk remains with the lessee.

Novated Leases Benefits

A major benefit of Novated Leases is that the total cost of the vehicle is allocated against the employee's package, with expenses deducted from pre-tax salary.

  • With Novated Leases all running costs are paid in pre-tax dollars, which can be tax effective.
  • Custom Fleet Novated Leases helps you cost-effectively package the motor vehicle of your choice.
  • Custom Fleet Novated Leases give access to fully maintained second-hand vehicles with potentially lower rental and FBT liability.
  • With our Novated Leases, enjoy Custom Fleet's standard 'Peace of Mind'  Plan for redundancy protection (terms and condition apply)
  • Custom Fleet Novated Leases Monthly Vehicle Reports outline important information on how the vehicle is tracking to the program. For added convenience, these reports are emailed directly to you.
  • Novated Leases are portable and may be re-novated from one employer to another (depending on employer acceptance).

Novated Leases FBT

Fringe Benefits Tax, or FBT, is a tax payable by employers on the value of certain fringe benefits that have been provided to their employees. Motor vehicles supplied to employees under Novated Leases generally attract an FBT liability. With Custom Fleet Novated Leases, our Novated Leases Monthly Vehicle Report provides constant FBT tracking based on the odometer readings provided when filling up at a petrol station.

Managing your Novated Leases FBT with Custom Fleet

Custom Fleet’s Novated Leases make Employer FBT Reporting easier:

  • Our Novated Leases Cost-to-Package quote includes confirmation an estimate of the relevant monthly FBT liability for the selected motor vehicle based on the information provided.
  • Our Novated Leases Monthly Reports sent to both employee and employer confirm the budgeted FBT amount for both the Period (month) and the 'Package Life to Date'.
  • An annual Novated Leases FBT liability report helps employers with their FBT year-end reconciliation process.
  • With terminated Novated Leases, Custom Fleet provides the employer with a package reconciliation including FBT information.

Novated Leases Solutions

Novated Leases Monthly Reports
Monitor your Novated Leases spend versus budget with our Novated Leases Monthly Vehicle Reports detailing the balance of your Novated Leases package on a 'life to date' basis.

Novated Leases Cost to Package Quote
Custom Fleet provides a comprehensive cost-to-package Novated Leases quote outlining a breakdown of lease and packaging components, including: monthly Novated Leases rental, fuel, other running costs, FBT payable, and an estimate of how your Novated Leases repayments will affect your take home salary based on the information provided.

Novated Leases FAQs

  1. With Novated Leases, who can drive the vehicle?

Novated Leases are regarded as private cars that effectively receive all the benefits of a company car, meaning that the level of private use and choice of drivers is totally up to the employee; insurance considerations notwithstanding.

  1. Can tolls and parking infringements be included in my Novated Leases expenses?

Currently the Australian Tax Office (ATO) guideline states that tolls, parking and infringement costs are not eligible to be part of the costs of Novated Leases.

  1. What are the potential tax benefits of Novated Leases?

Under Novated Leases agreements, the employer-provided motor vehicle is one of the few salary package items that currently provides taxation concessions. Custom Fleet recommends that employees seek independent advice.

  1. What is the Luxury Tax Limit and how does it affect Novated Leases?

Novated Leases vehicles valued at over $57,009 are subject to a Luxury Tax in addition to the GST. This tax is included in the monthly Novated Leases Rental.