Novated Lease for Sole Traders
Are you looking for a new work car? We’re here to help! With a novated lease, you get to choose a vehicle you love while a financier buys it on your behalf. You then lease it back for a set term with fixed monthly repayments, with options to bundle in the car’s running costs. When the lease ends, you decide whether to buy the car, trade it in (hello upgrade!) or refinance the residual value. It’s as simple as that.
How would a Sole Trader Novated Lease work?
For sole traders, the process requires a few extra steps. Novated leases typically rely on a three-party agreement between the employer, employee and leasing company, with the employer handling payments through salary packaging – unlocking tax savings for the employee. Since sole traders don’t have an employer to manage this setup, they’ll need to explore alternative structures to access similar benefits.
We’re here to help make a novated lease a practical solution for self-employed professionals, while you save heaps on a car you love.
Sole traders operating through a company structure – where you pay yourself a salary – might still be in the game for a novated lease. In this case, your business steps in as the ‘employer’ in the leasing equation. To get started, you’ll need to show the numbers – think bank statements and tax returns – to prove your income is steady and solid.
Tesla Model 3 Car and running costs over 4 years
Get a Quote for a Novated Lease Sole Trader Today
While it’s not as easy as ‘normal employees,’ this path can still lead to some serious perks. With the right paperwork and solid plan, a novated lease could still work for sole traders.
The best way to see if you qualify? Get in touch. Find out exactly what your options are for a sole trader novated lease with Leaselab. Try our calculator and speak to a leasing expert who will prepare a free quote so you can see the numbers in black and white. Leaselab is here to open up the doors of your dream car today.
Frequently Asked Questions
Who owns the car under a sole trader novated lease?
Under a sole trader novated lease, the financier technically owns the car – you'll be leasing it off them for the lease term. However, it's registered in your name and you can drive it like it's your own.
How much of a sole trader novated lease is tax deductible?
A novated lease isn’t considered a direct tax deduction like traditional business expenses for companies. Instead, the real benefit lies in how it reduces your taxable income. Your employer deducts the lease payments from your pre-tax salary, which lowers the amount of income subject to tax. This structure, known as salary packaging, is what creates the significant tax advantages – not the lease itself being classified as a deductible expense.
Is a sole trader novated lease worth it for high-income earners?
In general, those in higher tax brackets benefit the most from a novated lease, as their higher marginal tax rates mean greater tax savings. Opting for an eligible EV or PHEV (until 1 April 2025) can increase those savings even further – thanks to the exemption from Fringe Benefits Tax.
Save thousands in tax by driving your dream car
For Drivers
Leaselab is committed to protecting your privacy. Our Privacy Policy contains important information about how we collect, hold, use and disclose personal information. Terms of Service. © year Leaselab. ABN 45 635 559 269. Powered by TAG
