Every so often, a unique opportunity presents itself that seems too good to be true, and in almost all instances, this is exactly the case. Therefore, if you were told you could have annual tax savings of up to five figures through a salary packaging arrangement simply by opting to purchase an electric vehicle as an alternative to a petrol car, then you would probably think this is just another one of those too good to be true moments.
However, it is a reality. The 2022 Electric Car Discount Fringe Benefits Tax amendment saw many electric, plug-in hybrid, and hydrogen vehicles come under the fuel-efficient Luxury Car Tax threshold (currently $89,332) and become completely FBT exempt.
To demonstrate the impact of this, consider the novated lease example below.
You could save a whopping $29,975* with Prosperity Smart Drive’s novated lease offer! (*incl. GST savings on the purchase price of the vehicle).
Here's what you need to know:
✅ You can drive away in a brand-new BYD Dolphin Premium with Carpet Mats, Premium Atlantis Grey Paint and Window Tinting for just $64,225
✅ With our novated lease offer, you could enjoy annual tax savings of $8,414.64
✅ The cost to take home pay would be just $249.21 per week* (*based on a gross annual salary of $100,000 over a 3 year fully maintained novated lease travelling 20,000 kilometres per year.)
✅ Lease includes Finance payment, Electricity, Registration, CTP, Comprehensive Insurance, Servicing, Tyres, Roadside Assistance and Minor Damage Repair Program.
With the amount of real cash savings over the life of the lease term, you could more than cover the final balloon payment when you opt for an electric car, compared to a petrol car that you need to dip into your savings to pay off, or to refinance and take out another loan over a now second-hand car.
As an employer, it is important to note there will still be a reportable fringe benefit that needs to be assessed on a case-by-case basis for each employee. However as outlined above, there are significant tax savings available through salary packaging these cars.
With the significance of the tax savings on offer, these changes may be something that interests you. Given this, and if you have been considering buying a new car then please reach out to our Salary Packaging and Novated Leasing team to explore some options and discuss what this could mean for you and your business.
