big car,
bigger savings

A novated lease is an agreement between yourself, your employer, and a novated lease provider (that’s us). Instead of buying a ute outright, or borrowing money to fund the purchase, you enter into a lease agreement with a lease provider for a fixed period - typically between 1 to 5 years.

During each pay cycle, your employer deducts the lease payment from your pre-tax salary, reducing the amount of income tax (PAYG) deducted. Unlike leases for other vehicles, a ute novated lease doesn’t require portions of the lease cost deducted from both pre and post-tax portions. This is because fringe benefits tax (FBT) doesn’t have to be accounted for, meaning the entire lease and running costs of your new ute can be deducted from your salary before tax.

For example:
If you had a monthly income of $7,000, you’d typically pay around $1,625 in PAYG tax. With a novated lease in the example of $1,000 per month for your brand new ute, the entire cost would be deducted from your $7,000 income (pre-tax).

This then reduces your taxable income $6,000, which in turn reduces your PAYG to around $1,275. So in this example, you’d save about $350 a month on tax.

Alternatively, you can look at it in terms of the net cost of the lease.

By saving $350, the after-tax cost of your ute's novated lease would be $650 per month. This gives you a saving of 35%. Add on to that the fact you avoid paying 10% GST on your new ute’s purchase price, that’s a total saving of 45% if you compare it to paying financing and running costs on your post-tax income!

If you’re looking for a new / used ute and you’re a PAYG employee on a regular salary, then it’s definitely worth considering a novated lease to reduce your tax bill.

If you’ve already got a ute, you could still be eligible. As long as your ute is less than 12 years old at the end of a lease agreement, you can get what’s called a ‘Sale and Leaseback‘ novated lease, keep your own car and start reducing your tax bill.

Don’t think you need to get a new ute to jump on board and claim the benefits of a novated lease. Get into the action today!

Your employer manages payments for your ute using your pre-tax income before paying your salary, super and tax as usual. This is only possible with a paid salary, so an “employer” is simply a company that pays you via PAYG. This means you can be self-employed and eligible for novated leasing, provided you have a company and pay yourself via PAYG.

Leaselab is not able to provide financial advice around PAYG and salary setups, but are happy to liaise with your accountant and work through it together.

Utility vehicles are soaring in popularity, and there is an FBT exemption for eligible commercial vehicles, including dual-cab utes, that applies if the vehicle is not principally designed to carry passengers and private use is limited.

To benefit from the concession, the ATO requires that the ute is used primarily for work purposes, which also includes commuting to work. If the total determined passenger weight exceeds the remaining load capacity, a dual cab ute will be subject to FBT for all private usage.

You can include the ute plus all of its running costs. That means fuel, servicing costs, new tyres, car insurance, roadside assist and even your rego. The more you include, the bigger your tax savings.

But we’re also flexible. Some people like to arrange their insurance or servicing separately, and that’s totally fine. Our novated lease plans offer three easy options for you to consider:
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1. 'Basic' - just the ute
2. Fully covered' - the ute + everything'
3. Tailored' - the ute + custom inclusions

It’s important to note that some items are not considered to be legitimate ute operating costs by the ATO and are therefore unable to be included in a novated lease. These items include, but are not restricted to, road tolls, parking expenses, fines and infringements costs, and vehicle options or accessories fitted after the delivery of the ute.

On average, about a week. But it really depends if your employer is set up for novated leasing and how long it takes to find the ute you want.

If your employer doesn’t do novated leases yet, we can guide them through the process and get them set up super fast. It's not a particularly difficult process.

If you have a ute in mind, we’ll first aim to get you a better price than at the dealership through our fleet pricing network (that takes around 1-2 days).

Then, we reserve the ute and get your finance approved with a finance application (around 2-3 days).

If you’re not sure which ute you want, don’t worry - we can help you choose one within your budget. That’s the fun part for us.

At the end of the lease you can choose to either:

1. You may keep your ute by paying off the residual
2. Sell your ute and use those funds to pay the residual, then pocket the difference as profit. Then lease a new ute and go on a relaxing holiday.
3. Refinance the residual with a new novated lease.
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Most of our clients like to sell their ute and hop into a new one by setting up a new novated lease when the previous one ends, and we can help you sell the ute without any hassle.

It’s rare that a customer would want to end a lease early, but it’s definitely possible and we’d arrange this for you. The only requirement to cancel early is paying the remaining lease payments and the residual.

If your lease has been running for a while, chances are that the value of your ute will be higher than the amount owing, so you'll be able to sell the ute and pay off the lease.

If you want to end the lease in its early stages, the ute may well be worth less than the outstanding amount, so you will have to put in some of your own money.

Either way, we're always happy to chat through your options first. And it’s worth noting that most financiers don’t charge any fees for ending a lease early. In fact, they often give a discount if you end the lease early.

If you lose your job, you can take on the lease payments yourself until you find a new job and then transfer your lease to your new employer when you’re ready.

If you change employers while you’re on a novated lease, your new employer just needs to agree to make your ute lease payments from your pre-tax salary. At that point we'll get them to sign a one-page novation agreement and give them the pre- and post-tax deduction numbers to enter into their payroll system. And that's it. Your old employer will stop paying your lease when they stop paying your salary.

We’ll be happy to chat to your new employer to walk them through the process.