How the arrangement works
The employee selects a vehicle and the employer agrees to make lease payments from salary under a novation agreement. Responsibilities can change if employment ends, so read the transfer and termination terms.
Understand the quoted tax treatment
Quotes may show pre-tax and post-tax deductions and GST treatment. Finance providers explain their product, but personal tax outcomes should be checked with a registered tax agent.
Plan for the residual
A residual amount usually remains at the end. Options may include paying it, refinancing subject to approval, or changing vehicles, and market value is not guaranteed to match the residual.
Key points
- Three parties are involved
- Employment changes can affect the lease
- Tax outcomes need qualified advice
- Plan for the end-of-term residual
Frequently asked questions
Do I personally claim the GST?
The treatment depends on the structure; do not assume a personal GST credit. Ask the provider and tax adviser to explain the quote.
What happens if I change jobs?
The obligations do not necessarily disappear. Review whether the new employer can accept novation and what payments apply meanwhile.