Salary Sacrifice 

Salary Sacrifice is simply paying for a benefit such as a car before tax.

This means you pay less tax and have more money in every pay. More people finance their new car, pay fuel, servicing, replace tyres and pay the annual insurance and registration. Salary Sacrifice allows you to pay for these casts in a simple deduction before tax.

Use our Salary Sacrifice Calculator to see how much you could save.

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How does salary sacrificing a car work?

Salary Sacrificing is one of the most affordable ways of buying your next new or used car. Depending on the cost of the vehicle most people can save between $2,000 to $4,000 every year in tax by simply paying for the finance and vehicle running cost in a pre-tax payment. For most people these savings equate to free running costs for the life of the finance. But how does it work?

Salary Sacrifice or Salary Packaging is a simply deduction (“sacrifice”) from your pay before tax that your employer will use to pay for all of the running costs on the vehicle including the finance. Because your employer is making these payments on your behalf they also pass on all of the GST claims on these payments so you save even more.

Here’s an example

Jane works as a Police officer and is looking to purchase a new ute for $45,000. Jane is on $96,000 in annual salary. Jane doesn’t have the cash to buy the new ute so is looking into two options;

OPTION 1

Finance the car with her local Credit Union at 4.5% fixed and pay for all of the running costs from her net pay. Her fortnightly runnings costs are; Finance $382.00, Fuel $110.00, Tyres $15, Servicing $14, Registration $42, Insurance $38 = $601 Per Fortnight

OPTION 2

Salary Sacrifice through her employer. Using a Novated Lease through Vehicle Solutions and the same running costs as above, her fortnightly result is; Lease $342, Fuel $110.00, Tyres $15, Servicing $14, Registration $42, Insurance $38 = $561 Per Fortnight

However as these expenses are salary sacrificed Jane will save $18 in GST and $74 in income tax every fortnight, this reducing Jane’s total cost to $469 per fortnight. Jane saves $132 every fortnight by simply using her work place provided Salary Sacrifice benefit.

Government departments and large employers have provided Salary Sacrifice as the cornerstone employee benefit for over 20 years and it still remains the most affordable way to finance and run your vehicle today. Use our online calculator above to see how much you can save or please feel free to call us anytime on 1300 990 880 during office hours.

HAVE YOU FOUND YOUR NEW CAR YET?

Your Salary Sacrifice savings starts with the best price on your new car. Try MotorBuys. There is no other site in Australia that provides the same level of choice, protection, pricing and transparency. MotorBuys is designed to find which dealership has your new car in stock at the best price. At the push of a button you can choose the exact car including colour and accessories and submit your request anonymously to every single dealership in the regions you choose without any sales pressure. This is the way car buying should be, visit www.motorbuys.com.au.