Salary Packaging/Leasing
Through salary packaging (or salary sacrifice) you may reduce your income tax, lower your car running costs and increase the total value of your pay-packet.
Don’t think that only high income earners can benefit from salary packaging. You might be surprised how affordable it can be. You can save money on vehicle financing and running costs by using pre-tax income to pay for vehicle expenses. It may even cost you less than what you are currently spending!
Police Bank offers you what you might be looking for when it comes to Motor Vehicle leasing.
Packaged Car Lease
Instead of buying your next car outright, you may be able to lease the car and pay all your running costs through your salary package.
Whilst salary packaging does attract fringe benefits tax (FBT), the further you drive each year the less FBT you have to pay. Also, by paying some costs yourself, you can reduce your FBT liability.
An Example
Let’s consider John and Jill, each on a salary package of $45,000 p.a. They each buy a $30,000 car, John through a personal loan and Jill through a packaged lease. Each drives about 30,000 km p.a.
After paying for all car expenses, Jill’s packaged car lease gives her nearly $3,000 more in after-tax, take-home pay.
| The car packaging difference* | John Not packaged $ | Jill packaged $ |
| Gross salary package | 45,000 | 45,000 |
| Total lease and running costs | - | - 12,570 |
| Employee contribution | - | + 3,300 |
| FBT | Nil | Nil |
| Taxable salary | 45,000 | 35,730 |
| Income tax on salary | - 10,347 | - 7,427 |
| After-tax salary | 34,653 | 28,303 |
| After-tax car cost | - 12,570 | - 3,300 |
Net take-home pay | 22,083 | 25,003 |
Independent Salary Packaging Advice
We can also arrange an appointment with a Bridges Financial Planner who can provide independent personal financial advice taking into account issues like superannuation, tax minimisation and income returns.
What you can expect
Bridges Responsibilities:
- Assist you in understanding your options.
- Optimise your Package and determine savings you will achieve by Packaging.
- Provide a Statement of Advice, (a fee is payable for this service) confirming whether it is in your best interests financially.
Consultation Requirements
Should you wish to see the Bridges planner, please bring to the meeting the following:
- Assets – a list indicating your assets and approximate value
- Liabilities – statements of mortgage/s, personal loans, credit cards, etc
- Payslips
- Drivers licence
- Details of motor vehicle (if known) eg. make, model, registration number
- Leasing quote
- Estimate of kilometres
Steps for Salary Packaging and Motor Leasing
1. Contact our Leasing Hotline on (02) 9561 2913, or email: leasing@policebank.com.au to discuss leasing options, obtain a quote and lodge an application. We can also provide you with an insurance quote.
2. Choose the vehicle type that you wish to purchase and obtain a vehicle invoice.
3. Obtain running costs from Salary Package Administrator.
4. We will forward documents to you for signing. You will then need to forward these documents to your employer.
5. Settlement can then occur after these documents are returned to Police Bank by your employer.
