Novated leasing for small businesses
Novated leasing isn’t just for the big guys. Small but mighty businesses can also offer it, without any of the big business admin.
.jpeg)
Can small businesses offer novated leasing?
Yes. Novated leasing is available to businesses of all sizes. And setting it up? It’s simple and cost-neutral. Plenty of small business owners believe it requires a dedicated HR or payroll team.
In reality, businesses of any size can offer it, whether you have 5 or 20 employees.
Novated leasing for small business
Why offer novated leasing to your team?
Novated leasing is a valuable employee benefit that costs your small business nothing to offer. It’s got a lot more going for it, too:
It’s a practical way to attract and keep good people
When you’re competing with larger employers for good people, a car benefit can make your offer stand out. They’ll love you for it.
Give a pay rise that costs you nothing
Your employee pays for their car and running costs from their pre-tax salary, so they keep more at the end of the day. You don’t need to increase wages to make it happen.
Build loyalty in a small team
A benefit your staff use every day shows them you’re invested in their wellbeing, which can reduce turnover and the cost of replacing people.
The practical side of novated leasing for small businesses
Before you commit, it helps to know what you’ll pay, what you’ll manage and what you won’t. Here are the answers.
- What does novated leasing cost my business?
Nothing. Your employee pays for the lease from their salary, and you make the agreed deductions through payroll. Leaselab keeps its fees low and fully transparent, too.
- Will novated leasing create extra admin?
No. We’ll set up all the payroll deductions with you, and our team manages the lease with your employee throughout its term. Ongoing payments are simple, with flexible direct debit and invoicing options.
- What are my obligations?
As an employer, you’re obligated to pay the agreed salary sacrifice amounts through your regular pay cycle and account for Fringe Benefits Tax (more on this later).
- Am I liable for the car?
The employee signs the finance agreement and retains liability for the lease. You aren’t liable for the vehicle itself. You simply agree to make the salary sacrifice payments while they work for you.
- What happens if an employee leaves?
Your obligation to make payments ends when the employee leaves or changes jobs. The lease stays with them, so you aren’t tied into a car finance commitment you no longer need.
How to set up novated leasing in a small business
Leaselab handles the heavy lifting. Setting it up involves minimal paperwork and is guided step by step by our team.
- Create your profile with us
We'll help set up your profile and preferences, then walk you through the details your team needs. It’s designed to be quick to get going, keeping the process simple for your business.
- Set Up Payroll Deductions
We provide the pre-tax and post-tax deductions to enter into your payroll system, including Xero and MYOB. Once entered, the deductions run in your regular pay cycle.
- Ongoing Support From Leaselab
Once set up, it’s over to us. Payments can be made by direct debit or EFT on the same date as your pay cycle. After setup, your dedicated relationship manager is there when you need help.
How Leaselab helps with your Fringe Benefits Tax
LeaseLab handles Fringe Benefits Tax (FBT) for you. We’ll:
Offset any FBT liability you may have
Leaselab structures leases to achieve a $0 Fringe Benefits Tax (FBT) liability for your business, so there’s nothing extra for you to manage on that front. We know how to offer the most cost-effective solution for your business.
Manage the entire process
Make sure everything is clean and accounted for. Every lease is tracked from setup through to the end of the term, so your FBT position stays accurate without extra work on your side.
Provide FBT reporting
We’ll also support you with reporting so you have full oversight of the process. We’ve got all the figures you need for your records and your accountant.
Can small business owners lease a car for themselves?
Yes. If you’re a director but an employee of your own company, you can generally set up a novated lease through that company. It’s important to consider:
Your situation
Your situation may have specific considerations involving both your role as an owner and as an employee. Speak with your accountant or tax adviser first to confirm how it works for your business structure and remuneration.
Sole traders
If you operate as a sole trader rather than through a company, the arrangement is different. Novated leasing as described above relies on an employer-employee relationship, which a sole trader doesn’t have with their own business.
Why small businesses choose Leaselab
When your lease ends,you can choose to:The Leaselab Employer Portal gives you complete visibility over your novated leasing program from a single, secure dashboard. Plus, there’s more to love.
- No exclusivity
Our contracts have no exclusivity. We let our service do the talking.
- Strong customer satisfaction
We have an NPS score of 83, which is pretty exceptional in finance. Your team is at the centre of everything we do, and we’ve built the best customer service team in the industry to support them.
- RewardLab
Our employee benefits app helps your team improve their financial wellbeing, with exclusive partner offers on energy, vehicle chargers, solar and vehicle upgrades.
.jpg)
Book a call
Book an employer call, and we’ll help you understand how novated leasing could work for your business and your team. That’s one more step closer to being an employer that employees love.
FAQs
Can a director of a company get a novated lease?
Yes, in many cases. If you’re a director and employee of your own company, you can generally set up a novated lease through the company. Speak with your accountant or tax adviser to confirm how it applies to you. After you’ve spoken with an adviser, explore our entire range of cars or see an estimated quote using our novated lease calculator.
Is it hard to sign up a company to novated leasing?
Not at all! There’s minimal paperwork, and you’ll have a dedicated specialist guiding you through each step.
