Salary Packaging Gurus -   Experts in salary package consultancy & FBT compliance
Car Salary Sacrifice
 
Example A - New 4WD family wagon
 
Salary package advice, Salary package consultant, FBT advice, Novated Lease, Associate Lease

New 4WD Family wagon on road
$39,556
Annual operating costs
$  5,210
Annual kilometres travelled
10,000
Owned trade-in car value
$  6,000
Employee salary
$107,000
Spouse income
$0
3 School children, 15, 14, &12
 
1.     No Salary Packaging costs over 4 years 
4 years running cost @ $5,210 pa
$20,840
4 years finance costs @ $9,616 pa
$38,464
Initial loan deposit (no balloon payment) - no business use
$  6,000
No packaging total after tax cost over 4 years
$65,304
 
 
2.     Employer’s novated lease salary sacrifice costings
Annual lease and fees net of GST
$ 7,900
Running costs net of GST
$ 4,796
GST on contribution
$   682
Pre-tax sacrifice pa
$ 5,881
After tax sacrifice component pa
$ 7,497
Employee's overall drop in take home pay pa
$11,085
Minus: extra Family Tax Benefit
               $  1,172
Annual cost of Novated Lease
$9,913
4 years Novated Lease cost @ $9,913
$39,652
Plus: $0 deposit + $14,834 GST inclusive residual
                                      $14,834
                                                                     ---------
 Novated lease total after tax cost over 4 years
 $54,486
Gain pa $65,304 - $54,486/4
 $  2,705
    

 3.     Salary Packaging Gurus fully maintained associate lease salary package costings. Associa
   
Lease rentals to Spouse or partner 
 - Fully maintained
 $ 15,149
Running costs paid by associate
$5,210 
GST on contribution
 $    208
Pre-tax sacrifice
$13,070
After tax sacrifice component
$ 2,287
Employee's overall drop in take home pay pa
$10,260
Minus:
* extra Family Tax Benefit
* Spouse surplus after paying car loan and running costs (no tax)
                                      $5,394
                                      $   323
                                      $5,717
Annual cost of associate lease
$ 4,543
4 years @ $4,543 + $0 loan balloon + $6,000 deposit
                                                           $24,172
 Gain pa $65,304 - $24,172/4
 $10,283
 
Example B - No Package Existing Unencumbered
2010 Model Family Car
Salary package advice, Salary package consultant, FBT advice, Novated Lease, Associate Lease

Car retail value
$12,600
Annual operating costs
$7,200
Annual kilometres travelled
22,000
Employee salary
$66,000
Spouse income $6,000
  $6,000
Children aged 4 & 2

1. No Salary Packaging costs over 3 years 
Running costs @ $7,200 pa                                                              $21,600 
2.     Employer’s novated lease outsourcer salary package costings 
N/A their car age limit was a 2011 model and they declined to quote, and would not transact a sale and leaseback. 
3.     Salary Packaging Gurus fully maintained associate lease salary sacrifice costings. 

Lease rentals to spouse fully maintained - no business use
$10,628
Running costs paid by spouse
$7,200
GST on contribution
$0
Pre-tax sacrifice
$10,628
After tax sacrifice component
$0
Employee's overall drop in take home pay pa after L.I.T.O.
$6,802
Minus: extra Family Tax Benefit
                                  $   972
Extra Centrelink rent assistance
                                  $   739
Spouse tax free lease rentals left
                                  $3,428                  $5,139
Annual cost of Associate Lease
$1,663
 3 years @ $1,663 + $0 balloon + $0 deposit
 $4,989
 Gain pa $21,600 - $4,989/3
 $5,537
  
Virtually no employer salary package administration

The employee did not have to buy a replacement car, to obtain a salary package gain, despite being told this was the case by the employer’s novated lease outsourcer.
 
For each one replacement car bought by an employee, there are around ten existing cars that could be associate leased.
 
It would appear the main reason that this is not happening is that employers, employees, and taxation advisors are not aware that existing cars are eligible for salary packaging gains via Salary Packaging Gurus consultancy services.
 
Example C - New Luxury Car From 01.04.2017
 
Salary package advice, Salary package consultant, FBT advice, Novated Lease, Associate Lease

New luxury car on road
FBT taxable value - Statutory Formula
$110,611
$20,800
Annual operating costs
$6,800
Annual kilometres travelled
10,000
Executive income:
On top marginal tax rate
Spouse income
$0
Owned trade in car value
  $28,000
Car finance costs pa (no balloon) 6.3% all up
 $23,418
Employer type
 Tax paying company
 
1.     No salary packaging costs over 4 years 
4 years running cost @ $6,800 pa
$27,200
4 years finance costs @ $23,418 pa
$93,672
Initial loan deposit (no balloon)
$28,000
No packaging total after tax cost over 4 years - spouse car no business use
  $148,872
 
2.     Employer’s novated lease salary sacrifice costings 
Annual lease and fees net of GST 6.3%
$21,918
Non deductible grossup for lease
$3,404
Running costs net of GST
$6,240
Type 1 FBT GU 2.0802 x 47%
$20,336
Pre-tax sacrifice pa
$51,898
Cost of salary sacrifice in take home pay drop pa - 47% tax / Medicare levy saved
$27,506
4 years novated lease cost @ $27,506
$110,024
Plus: $0 deposit + $41,480 GST inclusive residual
$41,480
Novated lease total after tax cost (loss)over 4 years $151,504 - $148,872= $2,632
  $151,504
(loss pa $658)
   
 
3. Salary Packaging Gurus fully maintained associate lease salary sacrifice costings. Associate pays $6,800 running costs as recipients payments
Lease rentals to spouse or partner - Fully maintained
$34,591
Non deductible gross up
$3,551
Running costs paid by associate $6.800
$0
47% Type 2 FBT on $14,000 remaining 1.8868 Gross Up - not GST registered
$12,415
Pre tax sacrifice pa
$50,557
Employee's overall drop in take home pay pa - 45% tax rate / Medicare Levy 2%
$26,795
Minus: Spouse surplus after paying $23,418 car loan and $6,800 running costs
$  4,373
Annual cost of associate lease
$22,422
4 years @ $22,422 + $0 loan balloon + $28,000 deposit   
Gain over 4 years $148,872 - $117,688 / 4   No package = $31,184

* See more details
  
$117,688 
Gain pa $7,796

*
  • Car Depreciation Limit $57,581 until 30.06.2018 TD2017/18
  • Luxury Car Tax Threshold $65,094 until 30.06.2018 LCTD 2017/1
  • Fuel Efficient Car Limit $75,526 until 30.06.2018 LCTD 2017/1
  • "Green Car" Limit Fuel efficiency usage to be not over 7 litres per 100 Kms combined cycle from the department of environment green vehicle guide
 
Contact Salary Packaging Gurus today to get the right salary packaging advice along with Fringe Benefits Tax advice and you could save $1,000's.
 
We show you how to salary sacrifice and the best way of packaging your salary and usually without FBT.