Why Salary Package a Car? Here are 6 Great Reasons

Salary Packing is a new and highly beneficial practice offered by the Australian government that may help small businesses and individuals alike. According to the Australian Securities and Investment Commission, “Salary packaging is an arrangement between you and your employer where you pay for some items or services straight out of your pre-tax salary. Why Salary Package a Car? Here are 6 Great ReasonsThis can reduce your taxable income and put more money in your pocket.” Such an agreement benefits both you and your employer, and the items that you are able to salary package are wide ranging. You have the option to salary package items such as computers, childcare, and big ticket items such as cars. For those considering salary packaging their car, there are a number of excellent benefits as to why to do so.

It Saves You Money

First and foremost, salary packaging a car saves you or your small business money on the car. By paying for the car out of your pre-tax salary, you save money by lowering your taxable income. Depending on where and how you purchase your vehicle, you can also save even more money on the purchase price of the car.

More Spending Money for You

To put it simply, when you salary package your car you have more disposable income left for other expenses. While the salary packaging goes straight out of your pre-tax salary, you end up paying less tax and Medicare overall. For example, an analysis by H&R Tax Accountants indicated that an individual with a salary of $80,000 pre-tax and a car salary packaging of $10,000 had $54,653 of disposable income left compared to $51,253 without salary packaging of a car. Clearly, salary packaging your car has enormous monetary benefit; as such a difference in sum can go to an array of items for you and your family.

Reduced Cost of Operating Your Car

Depending on where you lease your car, different leasing companies offer a reduce cost of keeping your vehicle on the road. Most leasing companies indicate that the cost of operation is a combination of your pre and post-tax dollars. In addition, the cost of owning the vehicle can be set into monthly instalments, making it easier and more affordable for you and your budget. Most of the leasing websites have online calculators that can help you discern how much you will pay for the car and its operation when you use their leasing company.


Purchasing and owning a new vehicle isn’t always the most financially affordable move, especially when you are tight on funds. However, for those who are unable to purchase a new car, their old car may have a number of problems which create safety issues when commuting. Yet, with salary packaging a car becomes more affordable. New cars are equipped with dozens of safety features that can make the commute to work and elsewhere a much safer experience.


When you salary package a car, chances are that you will lease a car that abides by the country’s environmental guidelines. A lot of cars offered by leasing companies are certified as “green cars,” making them less environmentally damaging than other older models. Usually green certified cars also are more fuel efficient, cost less to insure, and are overall quite safe.

Less Hassle

There is nothing better than owning a car and not needing to deal with issues such as tax, insurance, and maintenance. Salary packaging your car is a move that allows you to own a car without needing to deal with such things, giving you more time to focus on other things. This is also perfect for individuals who do not have the ability to properly spend the time and funds to maintain a vehicle. Furthermore, once you are finished leasing the car, returning it is very simple. There are typically no additional charges involved, as long as it meets the required returned standards of the company.

Overall, salary packaging your vehicle has immense benefits for you both in the short term and the long term. It is an excellent way to save you money, give you back more of your salary, reduce vehicle operating costs, cut down on hassle, be environmentally conscious, and increase your safety while driving. If you are interested in salary packaging your car, you should speak to your employer about when you can begin the processes so that you see savings soon.

About William Hughes

William Hughes writes for car salary packaging company Novated by Fleetcare with offices in every Australian metro capital city.