FAQ - Frequently Asked QuestionsBelow are the most common questions we receive. If you have a question that is not answered below, or would like more information then just fill out the questionnaire to the right and we will get back to you.
If you have any suggestions, also don't hold back and use the form to the right to send them to us. We are always looking for ways to maximise your savings, currently this is for your car, we won't stop at that if you don't. |
What is a Novated Lease?
This like a normal car lease, except a third party (employer usually) gets in on the act by having the original lease "Novated" or transferred to them. Free Wheels uses a Novated lease to have your employer pay for the leasing costs of the car and deduct these from you wages, mostly from pre tax income - which means you don't pay income tax on most of the costs of running the car. In addition the costs of running the car become a business expense, which means you also save on the GST of the car running costs. These arrangements have been around for decades and normally very popular for high income earners, but we have found a way to make it work for average employee's.
What is FBT?
FBT is short for Fringe Benefits Tax, which is a tax that employers pay for benefits they provided to employees. Providing a car to an employee is one such benefit that is subject to FBT. There are several methods of working out how much tax is payable by an employer for a car they provide to an employee, but in general the more expensive the car is to purchase and the more private use of it you have, the more FBT is payable. Changes to FBT announced in the last budget also mean that high millage concessions previously available are being phased out, which in general is expected to increase the cost to employers of providing cars and increase government revenue. Free Wheels reviews your personal situation and uses the method that has the least FBT to ensure maximum savings to you and we use the contributions method of salary sacrifice so no FBT payable for your employer.