Vehicle Leasing Questions

• What is the maximum number of years  I can lease a vehicle for?

• Under the Corporate CarPlan (CCP) the maximum lease term is 5 years.
• Under the Government CarPlan (GCP) the maximum lease term is 3 years.

• Can I lease a vehicle if I'm employed in a fractional contract position?

• Possibly. Employees need to refer to the relevant policy for initial guidance. The issue will be how much salary you receive against how much a vehicle salary sacrifice packaging arrangement will cost to enter into and any LeasePlan credit assessment. Contact the LeasePlan Novation Centre on Ph 1300 668 572.

• Vehicles under the CCP and GCP are comprehensively insured as part of the vehicle salary packaging arrangements. Please see the relevant User Guide for more information.
• Contact LeasePlan's National Claims Centre on 1800 646 422 following an accident and LeasePlan will handle all the necessary details.
• Full details regarding LeasePlan's insurance product can be found here.

• Yes. This option is certainly available, subject to LeasePlan's conditions regarding the age/km's travelled of the vehicle in question. Refer to the UTAS CCP User Guide. You will have to supply written quotes to LeasePlan regarding pricing for second-hand vehicles for their consideration. Please do not commit or sign up for a vehicle until you receive confirmation from LeasePlan.

• There are. The fees and charges to salary package a vehicle under the CCP and GCP are outlined in the Policy and Procedures for both schemes. Fees and charges are deducted from pre-tax salary.

• You can make a personal contribution to lower FBT value and residual price of the vehicle, when entering a lease, although LeasePlan limit this amount to 20% of the value of the financed vehicle.

• I tried to generate a Quote through Drivers Online and received an error message:
  "The Total Amount Financed (including options) of exceeds 80% of your salary. Please change your selection of vehicle and/or options."

• Although UTAS allows employees to salary sacrifice up to 100% of salary, LeasePlan restrict the vehicle purchase price to 80% of salary in the Drivers Online system to act as a safety net to prevent possible over commitment for a vehicle lease. Contact the LeasePlan Novation Centre on Ph 1300 668 572 to discuss your quotation.

Payroll Questions

• Is it possible to calculate what the effect will be on my fortnightly pay?

• Using the Drivers Online tool produce a costing of the required vehicle.
• Print off or have your latest UTAS payslip available.
• Open the Salary Sacrifice / Employment Flexibility Options Calculator spreadsheet.
• Enter your details and confirm that your Net Pay on your payslip matches the Net Pay shown in the spreadsheet (ignore rounding of $0.01). This will ensure that you are working from the correct starting position.
• From your LeasePlan Package Estimate / Quote enter the monthly rental/lease amount, distance travelled per annum and the FBT Base Value into the vehicle sacrifice section.
• The spreadsheet can also be used to toggle between making an after-tax Employee Contribution (ECM) or not.
• The spreadsheet will show the estimated fortnightly salary in the Comparative column. Compare this figure back to your payslip.
• It is strongly recommended that financial advice should be sought by all employees prior to entering any salary sacrifice arrangement.

• What effect does salary sacrificing a motor vehicle have on my Payment Summary (Group Certificate)?

• The pre-tax sacrifice component reduces your taxable salary and thus reduces the reported Gross Payments to the Australian Taxation Office.
• The grossed up taxable value of the motor vehicle however will be reported on your Payment Summary as a reportable fringe benefit. The grossed up taxable value of the motor vehicle can be expressed as the taxable value x 2.1292.
• By electing to make an after tax contribution towards the cost of the motor vehicle via an ECM arrangement the taxable value of the vehicle can be reduced or eliminated. Please seek financial advice if you are uncertain as to the effect of salary sacrificing a motor vehicle or adopting an ECM arrangement.

• Can salary sacrificing a motor vehicle affect any other Government payments?

• Yes. Reportable fringe benefits (see Payment Summary Question above) are included by most Government agencies in income tests such as family allowance payments, child support obligations, Medicare levy surcharge, HECS/HELP repayments, etc.
• By electing to make an after tax contribution towards the cost of the motor vehicle via an ECM arrangement the taxable value of the vehicle can be reduced or eliminated. Please seek financial advice if you receive any such payments or if you are uncertain as to the effect of salary sacrificing a motor vehicle or adopting an ECM arrangement.
• Some government agencies such as Centrelink require people receiving benefits to disclose all income and packaged benefits and also when there are changes to such arrangements.

• I have a HECS / HELP Debt. Is there anything I should should know before entering into a motor vehicle packaging arrangement?

• Yes. As outlined above, reportable fringe benefits are included in income tests such as HECS/HELP repayments.
• The taxable salary that you are paid on a fortnightly basis will be assessed against the HEC/HELP repayment thresholds and the correct amount of PAYG tax will be calculated on those amounts. However PAYG tax will not be calculated to include any reportable fringe benefits. When the ATO assess your HECS/HELP repayment situation and include any reportable fringe benefits you may end up with an amount to be paid.
• Staff with HECS/HELP Debts should understand fully this potential issue or seek financial advice to assist them in fully understanding the effect of reportable fringe benefits on their HECS/HELP repayment.

Fringe Benefits Tax Questions

• How does the distance travelled per annum or yearly kilometres work?

• Contracts Pre 7.30pm 10th May 2011

• Fringe Benefits Tax (FBT) is calculated using the statutory formula method. This method assesses the kilometre’s travelled in each salary packaged vehicle held during the FBT year (1st April to 31 March of the next year) on a pro rata basis against several defined brackets of distance travelled ie: 0 - 14,999 km; 15,000 - 24,999 km; 25,000 - 40,000 km and Over 40,000 km.

• If you commence packaging a vehicle on 1st September 2007 then the pro rata km required at 31st March 2008 to be just in the 25,000 to 40,000 km bracket is 14,550 km (vehicle held for 213 days out of possible 366 days during FBT year - leap year).

• The distance travelled per annum or yearly kilometres is a combination of private and any business kilometres travelled or expected to be travelled.



• Post 7.30pm 10th May 2011 (New Contracts)

• Fringe Benefits Tax (FBT) is calculated using the statutory formula method.  From the 10th May 2011there are new arrangements for the calculation of FBT, put simply by the 1st April 2014 the statutory rate used to calculate FBT will be 20% regardless of kilometres travelled in that year.  There are transitional arrangements in place for new contracts, please refer to the New Lease area on the Vehicle Salary Packaging web site.

• Are there any FBT consequences if I don't meet my kilometres (yearly or pro rata)?

• Contracts Pre 7.30pm 10th May 2011

• Yes. If the kilometres that you have travelled on a pro rata basis mean that you have dropped from one FBT bracket down to the next one then you will incur additional FBT costs.

• In general terms dropping from one FBT bracket down to the next doubles the FBT cost that you will be required to pay. Where additional FBT cost is incurred, the University will recover this from your pay at the rate set out in the procedures document. Employees agree to these conditions when they elect to enter into a vehicle salary packaging arrangement.

• Employees need to fully understand their FBT
• In general terms dropping from one FBT bracket down to the next doubles the FBT cost that you will be required to pay. Where additional FBT cost is incurred, the University will recover this from your pay at the rate set out in the procedures document. Employees agree to these conditions when they elect to enter into a vehicle salary packaging arrangement.
• Employees need to fully understand their FBT obiligations prior to entering into any arrangements.

• Post 7.30pm 10th May 2011 (New Contracts)

• Possibly.  Transitional arrangements are in place for the calculation of FBT for leased until 1st April 2014, vehicles travelling over 25000 klms per annum will still need to meet there minimum budgeted kilometres in order to avoid additional FBT costs.  As at the 1st April 2014 the amount of kilometres will not affect the statutory rate which will be a flat rate of 20%.