WA Department of Education Novated Lease Guide: Salary Sacrifice Explained

Car prices are climbing, interest rates remain unpredictable, and budgeting is tighter than ever. 

If you're employed by the WA Department of Education and need a vehicle, buying one outright or through a traditional loan may not be the most cost-effective option.

This is where the Department of WA Education's novated lease offers a smarter solution. With Novated Finance Australia, you can package your vehicle's finance and running costs into one pre-tax salary deduction. That means no more juggling fuel bills, insurance, or maintenance costs out of pocket.

Let’s unpack how it works, who it’s for, and what benefits it brings for WA educators like you.

What Is a Novated Lease?

A novated lease is a three-way agreement between:

1. You as the employee

2. Your employer (Department of Education WA)

3. A leasing provider such as Novated Finance Australia

You select a vehicle, and the lease is set up in your name. Your employer facilitates the repayments through deductions from your pre-tax salary. 

That reduces your taxable income and can result in more take-home pay.

Unlike traditional leases, you have the option to own the vehicle outright by paying a residual amount at the end of the term.

Why WA Department of Education Staff Use Novated Leasing

Staff across schools and administration offices in WA are turning to novated leases for the following reasons:

• Fixed weekly payments with no unexpected costs

• Includes fuel or charging, registration, insurance, maintenance and tyres

• Reduces taxable income through salary packaging

• Flexible lease terms and a choice of new or eligible used vehicles

• Option to own the vehicle at lease end through a balloon payment

How Salary Sacrifice Works in This Context

Under a novated lease, your car’s costs are deducted from your gross salary, before tax is applied. This process is called salary sacrificing, and it effectively lowers your taxable income.

For example, if you take out a lease for an MG4 Excite Electric for $151 per week, your employer deducts that amount pre-tax and forwards it to the leasing provider. Your employer does not pay the lease but acts as the facilitator.

It simplifies your finances, streamlines your vehicle costs, and can create substantial savings compared to paying for a car post-tax.

Do I Own the Vehicle After the Lease Ends?

Yes. The vehicle is financed in your name. At the end of your lease term, you must pay the residual amount, also known as the balloon payment. Once paid, the vehicle becomes yours.

You can choose to:

• Pay the balloon outright and keep the car

• Refinance the balloon

• Sell the vehicle and use the proceeds toward a new lease

Ownership is transferred once the balloon is paid.

What’s Included in the Weekly Lease Cost?

A Department of WA Education novated lease through Novated Finance Australia is fully maintained. This means all essential vehicle-related expenses are bundled into a single payment.

Included:

• Vehicle finance

• Fuel or charging

• Maintenance and servicing

• Tyres

• Insurance

• Registration

This takes the hassle out of car ownership and makes budgeting simple.

Can I Lease a Used Car?

Yes, but with conditions. The used car must be no older than 15 years at the end of the lease term. 

This makes novated leasing accessible to those who prefer late model or near-new cars without the full cost of buying new.

This is ideal for:

• Budget-conscious drivers

• Families needing a second vehicle

• Staff seeking flexible ownership options

Fringe Benefits Tax and EVs

While Fringe Benefits Tax (FBT) generally applies to novated leases, there is an exemption for eligible electric vehicles. 

If your EV or plug-in hybrid is valued under the current Luxury Car Tax threshold of $91,387, you will not pay FBT.

Eligible vehicles under this exemption include:

• Tesla Model 3 from $199 per week

• BYD Seal from $174 per week

• MG ZS Excite EV from $175 per week

• Kia EV6 GT from $289 per week

• Xpeng G6 from $215 per week

This incentive makes electric vehicles more financially attractive through a novated lease.

Eligibility Criteria for a Novated Lease

You may qualify if:

• You are employed by a government or private organisation that offers salary packaging

• You are not a sole trader

• Your vehicle will not be used for rideshare

• You select a new or used car under 15 years of age by lease end

• You earn a regular income

Employment status can be casual, part-time or full-time as long as the leasing provider and employer agree to the arrangement.

What Should You Ask Before Committing?

To decide whether novated leasing suits you, ask yourself:

• Do I prefer predictable weekly payments?

• Am I looking to save on taxes and reduce taxable income?

• Do I want a new or near-new car without upfront costs?

• Can I commit to a lease term and a balloon payment at the end?

• Does my employer allow salary packaging?

If you answered yes to most, novated leasing may be ideal for you.

Benefits for Employers

Employers, including the Department of WA Education, benefit too:

• Improved employee satisfaction and retention

• No cost to the employer

• Reduced administrative involvement (handled by Novated Finance Australia)

• Flexible benefit offerings that enhance recruitment

All paperwork and lease administration are managed externally.

The Final Word from Novated Finance Australia

A Department of WA Education novated lease provides a practical way to drive a new or used car while saving on tax and simplifying vehicle expenses. 

As an educator or government employee, salary packaging allows you to bundle finance and running costs into one weekly payment.

We make the entire process quick and transparent. Whether you are interested in a BYD, Tesla, Mazda, or Mitsubishi, we can tailor your lease to your role, income, and lifestyle. We take care of the insurance, maintenance, servicing, and lease management from start to finish.

If you're ready to explore your leasing options. Learn more about novated leases, salary sacrifice, and our services across WA.

Get your quote today.

Frequently Asked Questions

• Can part-time staff apply for a novated lease?

  Yes, as long as your employer allows salary packaging and your income is consistent.

• Is the car mine at the end of the lease?

  Yes. You will need to pay a residual (balloon) payment to take full ownership.

• Can I get a lease for a used car?

  Yes, provided the vehicle is not older than 15 years at the end of the lease term.

• Does my employer pay the lease?

  No. Your employer only facilitates the payments through your salary. The lease is in your name.

• Is depreciation covered in a novated lease?

  No. The lessee (you) bears the responsibility for the vehicle's resale value at lease end.