Who is eligible for a novated lease in Australia

A novated lease is a popular car financing option in Australia, but it’s not available to everyone. So, who exactly can take advantage of this arrangement? Let’s break it down.

Eligibility Criteria for a Novated Lease in Australia

1. Employment Type
   To be eligible for a novated lease, you must be a salaried employee. This leasing option is often provided as part of a salary packaging agreement between the employer, employee, and the leasing company. Unfortunately, self-employed individuals and contractors typically cannot access novated leasing, as it requires an ongoing relationship with an employer who is willing to participate in the salary packaging scheme.

2. Employer Participation
   Not all employers offer novated leasing. Your employer must agree to take part in the arrangement, which involves deducting lease payments and associated vehicle costs from your pre-tax salary. Many larger organisations and government bodies offer novated leasing as part of their benefits package. If your employer does not currently offer it, you can always enquire to see if it's something they might consider adding.

3. Full-Time, Part-Time, or Contract Employees
   While full-time employees are the most common participants in novated lease agreements, part-time employees and contract employees may also be eligible if their employer agrees. However, some employers may have specific conditions, such as minimum working hours or employment duration, before offering novated lease options.

4. Permanent Australian Residents
   In most cases, to be eligible for a novated lease, you need to be a permanent resident of Australia. Temporary visa holders may not qualify for this type of leasing arrangement due to the long-term financial commitment it involves.

5. Financial Considerations
   Lastly, while novated leases provide tax benefits, they also involve a credit assessment. This means you need to have a stable income and a good credit history to qualify for a lease. Leasing companies will typically review your financial situation to ensure you can meet the repayment terms.

Ready to Get Started?

If you meet these criteria and want to enjoy the benefits of a novated lease, speak to your employer or a novated leasing provider today. A novated lease could be the tax-efficient way to get behind the wheel of your dream car. Contact us to learn more.