we had one with dh old boss- so from what i understand it worked like this - his car payment came out before tax so it helped us out a lot- mind you since building we are still paying off the car.........
Basically you salary sacrifice an amount from your pay, so your taxable income is less and you there for pay less tax.
The sacrificed amount cover the lease, petrol, servicing, rego, insurance etc.
Some firms will use a novated lease company who handles the lot, others do it all in house.
Basically they will pay your leasing as per their normal payment methods. The rest you normally pay and get reimbursed, unless of course they have a fuel card for you.
Ok, the catch is that you pay the Fringe Benefits Tax on it, as it is a fringe benefit. Now I have been out of this for awhile, but this tax amount varies depending on what travel you do, the more the better. Basically you want that tax to be lower than your highest marginal rate. So really you need to be earning a fair bit for it to be worth it.
Also the car lease will have a balloon payment, so at the end of the lease, either re lease a new car or payout the car to keep it. I think you maybe able to redo the lease on the current car.
So, yep talk to your accountant to see if it is worth it for you.
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