Myth #1: I Currently Own A Car So I Can’t Buy A New One

One of the most common myths about a novated lease is that if you currently own a vehicle you can’t replace it or buy another with this type of payment.

In Australia, over 1 million new cars are sold every year, which equates to about one new car being purchased every 35 seconds. Car purchase on a novated lease is one of the reasons why so many cars are being bought every year, and it doesn’t matter what the reason may be. Whether you’re looking to upgrade your current vehicle, hoping to replace an older model, or are looking for a safer and more family-friendly car, a novated lease can satisfy that need.

Myth #2: I Can’t Finance a Car

There are a variety of ways in which one can go about purchasing a car, including:

*Hire purchase
*A personal loan
*A car loan
*A mortgage redraw
*A novated lease

Of each of the above options, there is only one that will allow you to salary sacrifice your payments – the novated lease. With a novated lease, you can legally transfer all of the rights of ownership of the vehicle to your employer, and your employer will then become responsible for any car payments going forward. Best of all, you can use your pre-tax or gross salary to make those repayments.

Myth #3: It’s Bad For Budgeting

As long as you choose the right company to obtain a lease through, budgeting has never been easier. Simplygreen’s novated lease programme allows you to spread out all of your car payments for the year in easy and predictable monthly installments so you’re never stuck with a large, unexpected bill at the end of the month.

When you choose Simplygreen for your novated lease, you’re giving yourself permission to obtain the vehicle you want at a price you can afford. All of your costs are distributed evenly across the entire lease term, so your payments are consistent, reliable, and stress-free.

If you’re looking for a more cost effective way to run your vehicle, contact us today at Simplygreen Salary Packaging at 1300-664-323 for more information.

The post Dispelling 3 Myths About The Novated Lease appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

While there are a number of factors that contribute to the reasons why an employee may leave an organisation, a key one is that the job simply didn’t offer enough. Of course, an increase in pay is always nice, but it has been revealed time and time again that a $1 an hour raise simply isn’t enough to keep an employee engaged and on board. Employees want salary packages that cater to their needs, and creating those salary packages is an area where SimplyGreen has particular expertise.

The Cause Behind High Employee Turnover

There are a variety of reasons why Australians have chosen to leave their employers over the past few years. A recent Australian Human Resources Institute survey of just under 600 respondents cited the following for being part of the reason why there is a 13% turnover rate from 2012 to 2013:

• Lack of promotional opportunity (20%)
• Poor relationship with manager (17%)
• Insufficient pay (12%)

Interestingly enough, the dollar amount that an employee is paid isn’t the only type of compensation employees and job candidates are looking for.

Along with having company culture that is a good fit for an employee, being able to offer salary arrangements that fits with his or her lifestyle may tip the balance in favour of their accepting, and retaining, a role with you. And, importantly, many of the elements that can be included in a package can benefit the employer as well.

The Benefits of Salary Packaging for Employers

The benefit to an employee for choosing to salary package is that they are able to receive services or goods at a pre-tax rate. For the employer, however, you’re able to offer the best talent in your industry fantastic benefits that would otherwise cost them (or yourself) hundreds if not thousands of dollars in company resources.

Some of the most enticing salary packaging options that Simplygreen can include in tailored salary packages are:

• Novated car leasing
• Superannuation
• Self Education Expenses
• Income Protection Insurance
• Mortgage repayments (FBT exempt and rebatable organisations only)
• Rent payments (FBT exempt and rebatable organisations only)
• Personal loan and credit card repayments (FBT exempt and rebatable organisations only)
• Utility bill payments (FBT exempt and rebatable organisations only)
• Electronic devices
• Meals and entertainment (FBT exempt and rebatable organisations only)

When organisations, regardless of their size, choose to salary package, they are able to not only save a lot on taxes, but they’re also able to gain, maintain, and retain top talent. This means that you’re not only able to save company resources, but you’re giving your company the chance to develop and grow.

The Simplygreen team understands the ins and outs of salary packaging and the associated tax regulations, and is in an ideal position to advise you on the pros and cons as they apply to your organisation. We offer a variety of wages payment solutions to help you attract the best candidates in your industry while also saving money. We welcome your call today on 1300-664-323 to discuss how we can help you.

The post Why Salary Packaging May Be The Key To Reducing Employee Turnover appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

An Alternative Form Of Payment

Also known as “salary sacrifice”, salary packaging is an arrangement that’s made between an employer and an employee where the employee will be able to pay for ATO-approved services or items directly from pre-tax salary. This means that recipients of a package can increase their take home salary by 10% or more. Some common types of benefits include:

• Fringe Benefits (this includes items such as health insurance, vehicles, childcare expenses, and school fees)
• Exempt Benefits (this includes items such as computer software, electronic devices, tools, and protective clothing)
• Superannuation (employees may choose to redirect a portion of their pre-tax income into their super)

How Not-For-Profits Benefit More

The majority of employers in Australia are required to pay fringe benefits tax on the value of the different benefits that they provide to their employers (except for Superannuation, which is fringe benefits tax exempt for the employee). But unlike “profit” companies, not-for-profit companies are exempt from paying any fringe benefits tax (up to a certain value each year). The amount differs from company to company as it is dependent on the type of non-profit organisation that’s being run.

So what does this mean for not-for-profits?

It means that they can provide these non-cash benefits to their employees at a lower cost than most other companies. There are also additional concessions available to not-for-profits, such as their being able to provide loan repayments and entertainment cash benefits from pre-tax income.

Not-for-profits are often on a tighter budget than “for profit” or private companies, which is what makes this form of cost effective payment that much more attractive.

The end result of being able to offer any sort of attractive salary packaging is that you’re able to attract the best candidates in the field, keep your employees engaged and motivated in the workplace, and you’ll be able to retain your best staff so that your company continues to grow and become increasingly successful.

To learn more about salary packaging, contact Simplygreen Salary Packaging on 1300-664-323.

The post Salary Packaging For Not For Profits appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

One study, in 2011, from the Harvard Business Review Analytic Services revealed that an astounding 60% of businesses cited an attractive benefits package as a “very important” part to recruiting and retaining high quality employees. While there are a number of factors that the best candidates take into consideration before signing on with any job, one of the top considerations are the workplace benefits that a company offers. Here’s why:

Employees Can Earn More With Benefits

Savvy employees know that the right benefits package will be able to save them a lot in the long run. For example, let’s say that one employer is offering an employee $5,000 more a year while the other employer offers an attractive benefits package. That $5,000 increase in salary is going to be taxed, so nothing close to that $5,000 is going into your employees’ pocket.

The benefits offered in a workplace benefits package, however, will not be taxed at the same level – things such as cars, loans, electronic devices, childcare and healthcare.

Benefits Encourage Work-Life Balance

No employee wants to give up any component of their life to do a job. Depending on which benefits are offered in a package, employers can help promote an employees’ work-life balance. Health benefits, disability benefits, gym memberships, vehicles and even home office equipment for telecommuting are all examples of how these different benefits can help employees achieve the work-life balance they not only want, but need.

Shows Commitment

Employees want to know that their employer is just as committed to them as they are to their employer. The best job candidates out there are looking for an employer that’s interested in helping them grow, one who is happy to support that candidate in moving up in the company and fulfilling his or her career dreams.

A common benefit in a workplace benefits package is school tuition. Having an employer pay the school fees for the children of their employees is one example of how benefits demonstrate an employer’s care and commitment to that employee’s family welfare.

Many employers also cover the tertiary education fees for their staff who are undertaking career-related courses. This of course also benefits the employer, since they are helping develop a knowledgeable, experienced and loyal employee who is sure to stay engaged and highly motivated throughout their career.

We can help put together a workplace benefits package that is right for each of your employees – call us on 1300-664-323 for an initial no obligation discussion.

The post Why Better Workplace Benefits Attract The Best Employees appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

Impact on Salary Packaging

• With the introduction of the Temporary Budget Repair Levy, there will be a small increase in the FBT Rate. The increase is due to take effect from the 1st April 2015 and will see the FBT rate increase from 47% to 49%.
• In addition to the FBT rate increase, we will consequently see an increase in the FBT gross up rates
• This is a temporary measure and will apply until 31/03/2017.
• The good news is that the cash value of benefits received by employees of public benevolent institutions, public and not-for-profit hospitals and other tax-exempt entities will be protected by increasing the relevant concessional caps
• The statutory formula method for valuing car fringe benefits was left unchanged – so vehicle packages will continue to have access to a concessional rate
• the increase of the Superannuation Concessional Contributions Cap for employees under 50 from $25,000 to $30,000 will go ahead as planned from 1 July 2014

Our Customer Support Team is on call to answer any questions you may have, or feel free to chat with us online – simply click on the LiveChat link in the below right hand corner of your screen.

The post 2014 Federal Budget: Implications for Salary Packaging appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

 What Is A Novated Lease?

 This form of leasing a vehicle is a three-way agreement which involves the employer, the employee, and a finance company. The finance company will purchase the vehicle on your behalf, and the employee then pays the finance company an agreed amount every month (typically on a bi-monthly basis) for the next 1 to 5 years (however long the length of the lease is).

 Each time an employee makes a payment towards the lease, they’re reducing the balance owed on the car. Once the lease term is over, employees then have three options:

•  To purchase the car for its residual value (i.e. a percentage of the price for which the vehicle was initially financed)
• To refinance the vehicle
• To sell it

 Benefits Both The Employer And Employee

 A novated lease is a win-win situation for both the employer and the employee. Let’s first look at the benefits that an employee will enjoy:

•  All leases are paid with pre-tax dollars (which means employees will have a higher take home pay)
• Flexible leasing terms (employers and employees can upgrade to a different car whenever the need arises)
• Multiple vehicles can be leased at once
• No deposit required
• Unrestricted use
• The option to include the vehicle running costs (fuel, repairs, insurance, registration, etc.) as part of the lease payment

 For many employees, this is the ideal form of financing a vehicle for them and their family. But it’s also an ideal for the employer for a number of reasons, starting with:

•  Leased vehicles are not a liability or an asset
• Employers who are registered for GST can claim an input tax credit on any GST paid on the lease
• Lease rental payments or any payments that have been made under the lease agreement are an income tax deduction
• Minimised risk for the employer (i.e. if the employee chooses to leave your organisation, he or she is then responsible for the vehicle)

 Would you like to know how novated leases can work for you? Contact us, without obligation, on 1300 664 323.

The post Novated Leases: A Smart Choice For Employees And Employers appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

What Is A Salary Sacrifice?

 A salary sacrifice arrangement between an employee and his or her employer entitles them to certain benefits as long as they “forgo” part of their salary or wages. The benefits that an employee can enjoy often far exceed the after-tax salary they otherwise would have received, particularly as all benefits are provided to them at a pre-tax cost (i.e. no GST or income tax).

 Some common benefits include:

•  Healthcare benefits
• Childcare expenses
• Disability pay
• Cars and car loans
• Electronics and other “tools of the trade”

 Many employees also opt to have a portion of their pre-tax wages go into their Super account, which benefits both the employer and the employee.

 Getting Started

 Make The Arrangements Before You Start The Job

First and foremost, it’s important for employees, in particular, to note that the arrangement should be put in place before any work is performed in order for it to go into effect. If, after a job has commenced, the benefits are then offered, the employer may choose to not provide those benefits to the employee for any work completed in the time prior to the arrangement coming into effect.

 Make A Contract

Though a salary sacrifice can be entered into with a verbal agreement, it’s always a wise idea for employees and employers to get it in writing. A written agreement ensures both parties understand what was, and what wasn’t, part of the agreement should any future disagreement arise.

 Permanent employees can renegotiate the terms of their arrangement at any time, while any employee with a renewable contract can renegotiate the terms before each renewal.

 What If The Fringe Benefit Has Not Been Provided?

 Should an employee find themselves in a situation where they have not benefitted from the sacrificed salary in any way, then the amount of that benefit will be cashed out as salary and will then be taxed as ordinary income.

 To find out more about salary sacrifice arrangements, contact us on 1300 664 323.

The post Being Clear About Salary Sacrifice Arrangements appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

What Items Can Be Packaged?

Though there is no real restriction on what employers can include in their packages, the different types of benefits can be separated into three separate categories, starting with fringe benefits:

Different Types Of Fringe Benefits
There are a wide variety of fringe benefits, some of the most popular being:

• Health insurance
• Cars and loans
• Tuition fees
• Childcare expenses

At tax time, you will see the value of any benefits that you receive on your payment summary, though you won’t need to pay any tax or any Medicare levies on the sacrificed income.

TIP: Some benefits, like entertainment, won’t appear on your year end payment summary. These are referred to as “non-reportable fringe benefits”.

Different Types Of Exempt Benefits
These types of benefits won’t be included on an employee’s payment summary and the employer is not obligated to pay any fringe benefits tax. Some of these items include:

• Computer software
• Tools necessary for work
• Protective clothing
• Home office expenses
• Portable electronic devices (i.e. mobile phones, tablets)
• Super Benefits

The final type of benefit we’ll talk about is the superannuation benefit. Employees may be given the opportunity to place some of their pre-tax income into superannuation, which benefits both the employee and the employer.

Industries And Salary Packaging

Depending on the industry you’re in, you may be able to only package certain types of benefits. We’ll start with the most “giving” of the lot, charities and not-for-profit organisations:

Not-For-Profit Organisations (Including Public and Private Charity Hospitals)
Employees who work in these industries will be able to enjoy the widest variety of benefits, and employers are exempt from the limiting $2000 per year fringe benefits tax.

Government
Those who are working on a local, state or federal level of government are eligible for salary package benefits, though what an employee receives will be dependent upon the department or the agency the employee works in.

Corporate/Private Sector
There are a number of salary packaging benefits employees in this businesses sector can receive, from cars and electronics to extra superannuation and beyond.

To learn more about what can be included in salary packaging, please contact Simplygreen Salary Packaging on 1300 664 323.

The post What Can Be Included In Salary Packaging appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

Many people will be aware that the Rudd Government announced some radical changes to the way fringe benefit tax would be calculated on motor vehicles. If legislated, these changes would have an enormous impact on (not only) the salary packaging industry, but the wider motor vehicle industry. Since this announcement on the 16th July 2013, the industry has taken a hit, with widespread redundancies across many salary packaging companies. A significant down turn in new car sales since the announcement demonstrated just how significant these ill conceived changes would be to the industry.

Fortunately, Tony Abbott announced there would be no changes to current Fringe Benefit Tax legislation should his party be elected to government. In an open letter to the car industry dated 3 September, Prime Minister Elect Abbott and Treasurer Elect Joe Hockey again pledged that Labor’s proposed changes to FBT on salary packaged cars would be “null and void”.

What does this mean?

It will be business as normal for us and other salary packaging and novated leasing companies across Australia. If you already have a novated lease, there will be no changes to your arrangement so you can continue to take advantage of the FBT savings available under the statutory formula method. For anyone else contemplating a new car, now is a perfect time to consider the benefits of novated leasing.

Our dedicated team of sales consultants is on call to answer any questions you may have, or feel free to chat with us online – simply click on the LiveChat link in the below right hand corner of your screen.

The post Federal Election Update: Fringe Benefits Tax changes appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.

The “Who’s Next” campaign is intended to highlight the negative consequences of the Rudd Labor Government’s hasty and poorly considered decision to remove the statutory formula for salary sacrificed and employer-provided vehicles.

http://youtu.be/YyoJcOov_oo

The Rudd Labor Government’s move to change the rules for FBT is so far just a policy, not a law. So while the negative consequences of the decision may have already commenced, the policy can be overruled. The Coalition has stated it does not support the changes and will not pursue the measure in government. You can read their statement here

To show your support, visit the Who’s Next website and Sign the Petition

The post National awareness campaign launched to fight FBT changes appeared first on Simplygreen Salary Packaging | Novated Lease | Salary Sacrifice.