Employer Liability when offering Novated Leases

If you’re considering offering novated leasing to your employees, you may be concerned about your liability as an employer. The good news is that your responsibilities are minimal, and the risks are very low. Here’s what you need to know about your role in the process.

What Is Your Role as an Employer?

As an employer, your responsibility in a novated lease is to facilitate the salary packaging arrangement. This includes:

• Deducting lease payments from your employee’s pre-tax salary.
• Passing those payments directly to Clear Lease.

You’re not involved in managing the vehicle or lease beyond this administrative role.

Who Holds Liability for the Novated Lease?

With Clear Lease, the lease is entirely the employee’s responsibility. This includes:

• Vehicle ownership.
• Lease repayments.
• Ongoing maintenance and running costs.

If the employee leaves your business, the novated lease and its associated costs transfer with them.

You are no longer required to facilitate salary deductions and payments, Clear Lease works directly with the employee and their new employer to manage the remaining term.

All you need to do is contact our service team to let us know of the employees departure.

Are There Any Risks to My Business?

We go out of our way to ensure the risks with novated leasing are completely minimised.

The main risk is Fringe Benefits Tax compliance. We understand that not every organisation is equipped to handle FBT reporting to perfect accuracy. We however, do this day-in-day-out, and commit to continually review payments and deductions, and provide accurate reporting for you. We'll also proactively coordinate with employees if any adjustments need to be made to ensure this.

The thing we really rely on business for to minimise the risk, is ensuring the pre-tax deduction amount matches the lease agreement. This is something we also manage in the setup phase, by integrating with your payroll software.

Why Novated Leasing Is Low Risk for Employers

Unlike company cars, which require you to manage assets and assume full responsibility, novated leasing shifts liability and costs to the employee. This makes it a low-risk, high-reward option for offering a competitive employee benefit.

Clear Lease Simplifies Employer Responsibilities

At Clear Lease, we partner with providers who have done the work to make things easy, and we give that same effort to our business partners. We handle the heavy lifting, considering how every possible disruption can be minimised. From managing the lease setup to providing ongoing support, we make novated leasing easy, low-risk, and genuinely beneficial for your business.

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