Everything you need to know before applying for a novated car lease

Thinking about getting a new vehicle?

A novated lease is a popular way for employees to finance a vehicle using salary packaging. This guide explains how novated leasing works, its benefits, who is eligible, and how Whizdom supports employees through the process.

What Is a Novated Lease?

A novated lease is a three-way agreement between you, your employer, and a lease provider. It allows you to lease a vehicle of your choice while financing both the lease and operating costs through pre-tax or a mix of pre- and post-tax salary deductions.

How Does a Novated Lease Work?

You enter into a finance lease with a provider. A second agreement transfers some of your lease obligations to Whizdom. Once this is in place, Whizdom deducts regular payments from your salary and remits them to the lease provider to cover your vehicle’s running costs.

Benefits of Novated Leasing

• Tax savings:  Lease and operating costs are deducted from your salary before tax, reducing your taxable income
• FBT exemption:  If eligible for a fringe benefit tax-exempt vehicle, all costs are deducted pre-tax
• GST-free motoring:  Lease payments and running costs are GST-free
• No FBT liability:  Use post-tax contributions via the Employee Contribution Method (ECM)
• Used vehicles:  Option to package a second-hand vehicle (subject to conditions)
• Stamp duty savings:  The vehicle is registered in your name, so no stamp duty applies if purchased at lease end
• Discounts:  Access fleet discounts on purchase price and operating costs
• Flexibility:  Transfer the lease to a new employer or purchase the vehicle outright if employment ends

How to Apply for or Transfer a Novated Lease

Applying for a novated lease isn’t complicated, but there are a few steps to follow. Here's how it works:

Choose a lease provider

If you already have one, great, please let us know. If not, Whizdom has reviewed two providers to help you make an informed choice:

• Alliance Leasing
• Vehicle Solutions

Contact the lease provider

Reach out to your chosen provider to discuss your vehicle options and start the application. They’ll guide you through the paperwork and help you understand the costs and benefits.

Notify Whizdom

Once you’ve decided to proceed, fill out Whizdom’s Salary Sacrifice Novated Lease Request Form. This lets our Finance Team know you’re applying or transferring a lease.

Submit the paperwork

Complete any forms required by the lease provider. Please make sure to Cc Whizdom’s Finance Team email (accounts@whizdom.com.au) for signing any setup documents.

Once everything is approved, Whizdom will begin salary deductions and manage payments to your lease provider.

End of Lease Process

When your lease ends, Whizdom will complete a full package reconciliation. This shows either a surplus or deficit:

• Surplus:  Credited to your payroll
• Deficit: Must be repaid to Whizdom within 7 working days

The reconciliation includes:

• Payroll deductions
• Lease payments
• Operating cost reports
• Final FBT liability
• Any balances transferred from previous employers

Leaving Employment

Notify your lease provider if your employment ends. They will contact you to discuss your options. Once Whizdom is advised, a final reconciliation will be completed.

Need Help?

For questions or support, contact the Whizdom Finance team: accounts@whizdom.com.au