Frequently Asked Questions

How much can I save?

Because everyone has different circumstances and different expenses, the extent of the benefit differs from one person to another. If you would like to get an idea whether salary packaging would benefit you, contact the SPNT’s Business Relationship Manager for a personal information session and obligation free quote.

Who is Eligible to Salary Package

Any full time employee is eligible to salary package; however your employer needs to approve the service firstly due to FBT and GST requirements. SPNT can assist by contacting your employer and provide them with information on the advantages and simplicity of the service. Request Contact

What is FBT?

When an employer provides a benefit to an employee in lieu of salary, the ATO regards this as a fringe benefit. They are non-cash benefits provided in lieu of salary or wages. In this context, by paying for your item from pre-tax salary – the employer is providing you with a benefit.

A Fringe Benefits Tax (FBT) is a tax on these fringe benefits (except for items that as FBT exempt such as Laptops). It is designed to overcome past deficiencies in the income tax laws which allowed employees to receive part of their salary as tax free non-cash benefits.

FBT is assessed on an annual basis, with the FBT year running from 1 April to 31 March. While FBT is payable by the employer, the costs are passed on to the employee. SPNT work this out for you and build the cost into your payroll deductions so you do not have to worry about meeting the expense at the end of each FBT year.

How is FBT calculated?

Fringe Benefits Tax is calculated at 46.5% of the grossed-up value of the benefit provided.

For vehicles in a majority of cases the FBT is calculated using what is called the statutory formula. This formula is the FBT base value of the vehicle (cost price minus any government on road costs) multiplied by the statutory private use percentage. This statutory percentage is based on the total number of kilometres travelled in a 12 month period. These percentages are as follows;

1-15,000kms26%
15,001-25,00020%
25,001-40,00011%
40,001+7%

For example

If you salary packaged a $20,000 vehicle and you travelled 27,000kms a year your FBT would be;

$20,000 × 11% = $2,200

This figure is grossed up using the ATO gross up factor of 2.1292;

$2,200 × 2.1292 = $4,684.24
this is what is called your grossed up FBT value.

This figure is then multiplied by the FBT tax rate;

$4,684.24 × 46.5% = $2,178.17
this is the FBT required to be paid on you package.

Can I reduce or completely remove the FBT?

Yes, SPNT through your payroll department can arrange an after tax deduction called an ‘employee contribution’. The ATO allow an employee to pay the value of the FBT in an employee contribution towards the running costs on the vehicle to reduce the FBT to zero. Therefore in the above example if the employee contributed in after tax dollars $2,178.17 there would be no reportable FBT.

How is my FBT reported?

Employers by tax law must record the total value of any Fringe Benefits provided to employees. This is referred to as Reportable Fringe Benefits (RFB) and will be shown on an employees Group Certificate or Payment Summary at the end of the tax year.

Do I have to pay extra tax or levies or child support if I have reportable fringe benefits?

The amount recorded for RFB is not used to calculate any Income Tax figures. However, it can be included in a number of income tests relating to government benefits and obligations such as Child Support payments, Medicare Levy, HECS repayments and Superannuation Surcharge. For this reason you should always seek professional financial advise prior to entering into any salary packaging arrangement.

Can I add items to my vehicle after delivery and have them accommodated through my package?

Once your contract has commenced it will not be possible to add options (accessories) through your package. If you choose to add options to the vehicle after the contract has commenced they will need to be purchased at your expense and paid separate to your salary packaged arrangement. It is therefore important that you consider all options and accessories you require when requesting a Novated Lease quotation.

What term can I do a Novated Lease over?

You can finance a new vehicle over 1, 2, 3, 4 or 5 years and you can lease a used vehicle over a term so that he age of the vehicle is no more than 8 years old at the end of the lease. For example if you have a 5 year old vehicle you can lease this vehicle over 3 years.

Can I find my own new or used vehicle?

Yes, however SPNT salary package a lot of vehicles every month and have an entire department who have spent years establishing a network of vehicle dealers, both new and used that provide some of the best prices available. These prices are also available to your family and friends even if they don’t salary package so if you’re currently looking for a vehicle please contact us for a free no obligation quote, you’ll be surprised by the savings.

What happens if I go on unpaid leave (e.g. maternity leave, extended leave)?

If you take any period of extended leave or unpaid leave before the novated lease expires, you will need to decide what is to happen about the salary sacrifice that has been negotiated. If it is decided to repudiate the novated lease, as provided for under the novation agreement, the finance company will send you a notice of termination and thereupon, you will personally be responsible for all future lease rentals plus GST and duty (post tax).  You can of course to continue to make the lease and operating expense payments yourself during this period, but it is important to remember that once a vehicle is accessed under a novated lease it remains your property, regardless of unplanned circumstances that may occur.

If I change Employment, can I Novate the lease to the new Employer?

Yes, provided your new employer offers salary packaging as an employee benefit, and agrees to the novation agreement. If you would like to transfer your current lease and salary packaging arrangement please contact SPNT in your state.

What’s the next step?

If you like what you see and you would like some more information or would like a free no obligation quote please don’t hesitate to contact us on;