Let’s talk about how Novated Lease budgets work
Let’s take a look at the novated lease budget that RemServ request from your employer each pay, it’s a topic we get plenty of questions about.
Our customers generally understand that the regular amount they contribute from their pay covers their administration fee, lease payment and the running costs associated with their vehicle, how we calculate the amounts can be cause for confusion – but it’s actually simpler than people think.
Let’s use a new car from a dealership as an example (so it has new rego etc.).
Once your novated lease with RemServ is all set up, you get a nice new car, new registration, new insurance, new tyres, new everything! Which means we have a nice clear picture of when you will need to pay these expenses again. Some items, like Tyres, are a little different of course, but most other vehicle-related items are annual expenses. So, if your registration is $800, we know that in one year’s time we will need $800 of your before-tax money to pay for this. If you get paid fortnightly, we make collecting this amount easier by spreading the $800 evenly over the available pay cycles, which over the course of a year will be 26.
$800 divided by 26 is $30.77. So from your first pay with RemServ you will contribute $30.77 each pay for registration.
The above example is exactly the same for all your novated lease vehicle expenses.
Essentially you take the amount you need, the due date of the expense and then divide by the number of pays you have to accumulate the amount. It doesn’t matter how you get paid — weekly, monthly or fortnightly.
Something to be aware of is that for items like fuel and tyres, we are estimating how much you will use, and when you will need new ones, we do our best to collect the right amount, but it’s not an exact science.
Hopefully this has cleared up some of the confusion around how we organise your novated lease budgets. The most important thing to know is that it can be more flexible than you think and if you want to discuss your novated lease budget, don’t hesitate to get in touch with us.
Disclaimer: This website contains general information and doesn't take your personal circumstances into account. Seek professional independent advice before making a decision.