Salary packaging schemes such as novated leases have traditionally been seen as an incentive for employees, allowing them to use their salary to save on taxes and secure some great add-on perks.
However, there are also good reasons for employers themselves to offer salary packaging. While your employees take advantage of reduced tax obligations and an increased take-home pay, you can also stand to benefit in a number of ways.
1. Staff acquisition and retention
As salary packaging is essentially an employee perk, offering this option can make your business substantially more attractive to potential employees and give you a leg up in recruitment.
Listing benefits such as salary packaging can help you stand out as an employer of choice, while your current staff members will also be inclined to keep working for a company that offers this service.
2. Cost effective solution
Although salary packaging effectively increases your employees' take-home income, it actually costs your business very little to provide this option.
That is because lease payments and the like are taken out of your employees' pre-tax income, and both you and your employees can benefit from having less tax to pay at the end of the day.
Dedicated novated lease providers also offer easy payment options, with either a fortnightly or monthly option to take care of all costs involved - from the lease payments to insurance and servicing.
3. Easy on the balance sheet
The great thing about salary packaging is that it doesn't show up as an asset or a liability on your business's balance sheet, even for large investments such as a new car.
That means there are fewer things for your accountant to worry about and no tricky tax obligations to deal with.