See how much you could save working for a not-for-profit
Pay for everyday expenses from your pre-tax salary instead of after-tax. Same expenses, less tax, more money in your pocket.
Same expenses either way - the difference is when they come out.
| Without | With Packaging | |
|---|---|---|
| Gross salary | $-- | $-- |
| Salary packaging (living + meals) | $0 | -$-- |
| Admin fee (pre-tax, separate from cap) | $0 | -$-- |
| Taxable income | $-- | $-- |
| PAYG tax | -$-- | -$-- |
| Medicare levy | -$-- | -$-- |
| After tax | $-- | $-- |
| Post-tax expenses (same living costs) | -$-- | $0 |
| Net disposable income | $-- | $-- |
Your provider charges $0/fortnight ($0/year). Because it's pre-tax, you save $0 in tax on it - but it's still a real cost that reduces your overall benefit.
The savings shown above is the honest number: tax saved minus the admin fee.
A novated lease lets you finance a car through your employer with pre-tax salary deductions. Your lease payments and running costs (fuel, rego, insurance, servicing, tyres) are bundled into one payment, deducted before tax.
Key point: This is separate from your $15,900 + $2,650 packaging cap. You can do both.
Novated leases attract Fringe Benefits Tax (FBT) - a 47% tax on the car's value. To avoid this, most providers use the Employee Contribution Method (ECM): you pay ~20% of the car's value annually from your after-tax salary, which offsets the FBT to zero.
Example: $50,000 car = ~$10,000/year after-tax ($385/fortnight from your take-home pay).
This significantly eats into the tax benefit. A big chunk still comes from after-tax money.
You don't pay off the whole car during the lease. At the end, there's a lump sum remaining (set by ATO minimums):
Example based on $50,000 car
End of lease options: Pay the residual and own the car, or refinance into a new lease.
EVs: No ECM means real pre-tax savings.
Petrol/diesel: ECM reduces the benefit significantly.
A novated lease is separate from your salary packaging cap — you can do both.
1 April to 31 March — not the financial year. Your $15,900 and $2,650 caps reset each 1 April.
No. Most providers offer alternatives: direct payments to your mortgage/rent, or reimbursements to your bank account for expenses you've already paid. You'll need to provide proof (statements, receipts). Cards are just the most convenient option for flexible spending.
Mortgage, rent, credit card payments, personal loans, school fees, utilities, groceries, petrol — basically any regular household expense. Most providers give you a prepaid Mastercard to spend as you like.
It's a prepaid card that can only be used at venues coded as restaurants, cafes, pubs, bistros, and accommodation. It uses merchant category codes to determine eligibility — so it may not work at some food outlets that aren't coded correctly. Most cards can be added to Apple Pay or Google Pay for tap-and-go payments.
Takeaway or delivery, workplace cafeterias, or groceries. The $2,650 is for dining at qualifying venues.
Fees vary by provider and employer agreement. Common fees include an administration fee (deducted pre-tax each pay), card fees (monthly per benefit on the card), and international transaction fees for overseas purchases. Check with your provider for specific amounts — fees are paid from pre-tax salary and don't count towards your cap.
Yes, if your employer offers it. The annual caps are the same regardless of hours worked.
You keep the tax benefit on what you've already packaged — there's no clawback. Any unspent funds on your packaging card stay with you.
No. Your employer's super guarantee is based on your gross (pre-packaging) salary, which doesn't change.
It can. Your Reportable Fringe Benefits Amount (RFBA) is included in income tests for Family Tax Benefit, childcare subsidies, and other means-tested payments. Check with Centrelink if you receive benefits.
Your packaged amount grossed up by 1.8868. It appears on your payment summary and is used for income testing (HELP repayments, Centrelink, Medicare Levy Surcharge) — but it doesn't increase your income tax.
Your RFBA increases your "repayment income", which may push you into a higher HELP repayment bracket. However, you're paying off your debt faster with money that would have gone to income tax. Tell your payroll to adjust HELP withholding to avoid a lump sum at tax time.
You need to earn above the tax-free threshold ($18,200) and actually pay income tax to see any benefit. The higher your marginal tax rate, the more you save.
$15,900 applies to charities and Public Benevolent Institutions (PBIs). $9,010 applies to public hospitals and ambulance services. Your employer will confirm which applies to you.
Yes — contact your provider. You can increase, decrease, or pause at any time. Just remember the caps are annual totals, not pro-rata.
Unspent funds on your card roll over, but they count towards your new year's cap. You lose the tax benefit on any cap you didn't use. Spend your balance before 31 March if possible.
Yes — through a dealer or private sale. Most finance providers accept cars up to 12 years old at lease end. Private sales miss out on GST savings on the purchase price.
The lease transfers to you personally. If your new employer offers novated leasing, you can re-novate (typically ~$300 fee). Otherwise, you continue paying directly — like a normal car loan, without the pre-tax benefit.
Yes, but you'll need to pay out the remaining finance. If the car's market value is less than what's owed, you cover the shortfall. Structure your lease term to match how long you actually want the car.
No — the finance company owns it. You own it outright after paying the residual at the end of the lease.
PHEVs with leases that started before 1 April 2025 keep the FBT exemption. New PHEV leases from 1 April 2025 onwards are treated like petrol cars — ECM applies.
You'll pay excess km charges. Estimate your annual driving carefully when setting up the lease — it's hard to change mid-term.