Here’s How Offering a Novated Lease in Benefit Packages can Benefit Employees and Employers, Alike
Benefits packages make up an estimated thirty percent of total compensation of employees in the United States. Employers save money on health insurance and retirement plans, getting potentially sizable discounts from buying large bundles of benefits. This saves employers money by providing attractive compensation options without breaking their banks. If employers were to pay employees outright with cash, rather than purchasing workforce benefits in masse, they’d lose thousands of dollars in forfeiting benefits packages.
Many business employees, like the entire United States population, aren’t strapped with cash and able to purchase a new vehicle. Because employers have far more working capital than the individuals they employ, as well. The combination of these two factors results in employers being able to extend favors to employees by taking out a novated lease.
Lots of people in the great United States of America aren’t familiar with getting a novated lease. However, this far from suggests that they’re useless. Providing a novated lease as part of benefit packages provide a number of advantages to employers and their workers alike.
Let’s look a tad deeper in what a Novated Lease Calculator Stratton is and the benefits they offer employees and businesses.
What is a novated lease?
A business finances a vehicle from a dealership or manufacturer. Rather than the business utilizing the vehicle, an employee of the business is lended the car. Employees pay for vehicles taken out with a novated lease by having appropriate amounts of pay docked from regular paychecks. Rather than lessees going to financial institutions and dealerships to pay what they owe, automatic employer deductions help reduce costs of financing. This is advantageous for the business and its employees all the same.
How can employers benefit from a novated lease?
If employees default on payments, the company repossesses the car. This helps businesses because the vehicle is returned to ownership of the organization, rather than an independent car dealership, private owner, or financial institution. Organizations can feel safe in securing financing for their employees’ novated leases, as defaults don’t leave that business entity.
Novated lease benefit package offerings can also eliminate lots of money spent towards maintaining company vehicles. By having employees operate and — more importantly — pay for the vehicle’s maintenance, preservation of tip-top condition is now possible.
And what about employees?
Employees of large companies often struggle with money. Many people in dire financial situations come from families facing similar hurdles. Because most employees aren’t able to ask friends or family for paying down payments on nice vehicles, they’re able to take pride in their employer sticking up for them. This boosts employee satisfaction, attitude, and morale.
Workers are also subject to tax deductions from having money related to the lease taken directly from regular paychecks. This makes filing their current year’s tax return open to several deductions.
As our world increasingly progressive, employers are slowly changing their views towards the content of benefit packages. Offering a novated lease is sure to prove beneficial to all parties involves.