Nothing. S.P.A. charges no setup or ongoing administration fees to the employer. All costs associated with the vehicle are funded entirely through the employee’s salary package. Your payroll team’s only involvement is processing the pre- and post-tax deductions each pay cycle, using S.P.A.’s invoice.

No. While the employer is technically the liable entity for Fringe Benefits Tax under the FBTAA 1986, S.P.A. structures every novated lease using the Employee Contribution Method (ECM). The employee’s after-tax contributions offset the FBT liability in full, resulting in a $0 net FBT cost to the employer. Any shortfall in the employee’s post-tax contributions which results in an FBT liability is recovered directly from the employee’s salary packaging account.

Eligible electric vehicles below the fuel-efficient luxury car tax (LCT) threshold are exempt from FBT under s.8A of the Fringe Benefits Tax Assessment Act 1986 for vehicles first held and used from 1 July 2022. As a result, employers generally have no FBT liability on eligible EV novated leases, and employees are not required to make a post-tax employee contribution to reduce FBT. This allows eligible EVs to be packaged using entirely pre-tax salary, making them one of the most tax-effective vehicle benefits currently available in Australia.

The ATO requires any employer providing fringe benefits (including novated leases) to be registered for FBT and to lodge an annual FBT return (or a nil return if no net liability exists). Registration is a one-off step and can be completed through ATO Online Services for Business, via your registered tax agent, or by contacting the ATO.

Once registered, the FBT year runs 1 April – 31 March, with returns due 21 May (or 25 June if lodging through a tax agent). S.P.A. provides your annual FBT reporting pack to make lodgement straightforward.

If an employee resigns, is made redundant, or is terminated, the novated lease reverts to a standard finance agreement in the employee’s name. The employer’s payroll deductions cease immediately. S.P.A. manages the transition directly with the employee. Provided payroll deductions cease when the arrangement ends, there is generally no ongoing liability for the employer. In practical terms, the novated lease is a tripartite agreement between the employer, employee, and the finance provider.

No. A novated lease does not appear on the employer’s balance sheet and does not give rise to a right-of-use asset or lease liability under AASB 16 Leases. AASB 16 requires a lessee to recognise assets and liabilities only where a contract conveys the right to control the use of an identified asset. Under AASB 16 paragraph B9, control requires both:

(a) the right to obtain substantially all of the economic benefits from use of the asset, and

(b) the right to direct its use. In a novated lease, both of those rights belong to the employee, not the employer.

The employer never directs or benefits from the vehicle’s use; it simply facilitates the arrangement by processing payroll deductions and remitting payments on the employee’s behalf.