It’s often hard for small to medium business (SMEs) to compete for and retain quality people without matching the packages offered by large corporates. A novated lease, often misunderstood by many SMEs, is a very effective tool that can be used as a key benefit to attract talent.
What is novated leasing?
A novated lease is a legislated benefit any business in Australia can implement for their employees. It allows an employee to pay for their car running costs, including fuel, finance, maintenance, registration and insurance costs, out of pre-tax salary, potentially saving the employee thousands of dollars annually in the process. Novated leasing is considered to be the most powerful salary packaged tool accessible to an employee and can be used for vehicles with 100% private use. The best part of all, from an employer perspective, is it doesn’t cost a cent to implement.
A typical annual benefit accessed by an employee using novated leasing can be up to $6,000 per annum.
Seal the deal with a novated lease
Once the heavy lifting has been completed in any potential new employee negotiation, the deal clincher is often in the form of a benefit, such as a novated car lease. Conversely, the same is true for existing key employees with a current novated lease that may, without the employers knowledge, be being coerced away from your organisation. An average benefit for employees is around $6,000.
So why don’t all employers offer this as a benefit to their employees? The answer is simple says Rob Emmett, CEO of Express Fund Asset Finance, “there is a general lack of understanding and a perception that novated leasing only applies to certain industry classifications. Employers often put it in the ‘too hard basket’, as they wrongly think it will add an administrative and cost burden to the organisation.”
Quite the opposite is true. By engaging a specialist in this area all administration is handled without costing the employer a cent. In most cases the adoption of novated leasing as an employee benefit will have a positive benefit to an organisation by lowering bottom line costs such as payroll tax obligations. In short, an organisation can increase the value of it’s salary package offering without actually increasing your costs.
Express Fund offers a simplified, value packed and expert program tailored to meet the needs of the SME space in Australia. Partnering with Express Fund will allow your business to offer a program with all the benefits of a large corporate firm such as corporate discounts on servicing, tires, fuel and the vehicle purchase, in a simple and cost effective way.
For further information on how novated leasing can work for your organisation and how it can benefit your employees, click here or contact one of our team for an assessment on the viability of a program within your business.