Leasing terms made simple
Questions? If you can't find the answer here, call one of our friendly and professional consultants on 1300 668 283.
A vehicle’s Residual Value is the amount still owing on the vehicle at the end of the lease term. For example, if your vehicle is valued at $30,000 and over the course of the lease you pay off $20,000, the residual value of the vehicle will be $10,000.
The balloon payment is a final payout of any money owed at the end of a lease. Residual value and balloon payment are somewhat interchangeable.
Fringe Benefits Tax (FBT)
The Australian Tax Office defines Fringe benefits tax, or FBT, as;
“A tax employers pay on certain benefits they provide to their employees, including their employees’ family and other associates. The benefit may be in addition to or part of, their salary or wages package”.
Vehicles and parking spaces are taxable as fringe benefits. Salary sacrifices like a Novated Lease are also taxable. Here is a comprehensive list of taxable Fringe Benefits.
Find out how to calculate and pay your FBT and more.
Fringe Benefits Tax base value
According to the ATO, the Fringe Benefits Tax Base Value of a vehicle is determined by the following;
- The original cost of the vehicle (minus registration and stamp duty)
- The cost of any fitted, non-business related accessory.
- Dealer delivery charges.
You’ll need to know your vehicle’s base value to calculate your FBT obligations.
Find out more
Statutory and Employee Contribution Method (ECM)
Employee contributions are when an employee makes payments towards their car’s running costs out of their post-tax salary. Making these personal contributions can lower or even eliminate the amount of payable Fringe Benefits Tax and are often included as part of a salary packaging arrangement.
Find out more.
Maintenance involves the general upkeep of the vehicle such as servicing, tyres, oil etc. It does not include accessories added after the commencement of the lease.
A fully maintained lease combines all the vehicle’s running costs such as fuel, tyres, maintenance and registration into one simple, monthly payment.
Reimbursements are money returned for goods and services that are paid for and covered by the lease, but are unable to be billed directly to SupaNova.
For example, if you are driving in the outback and are unable to find a petrol station that accepts your fuel card, keep a copy of the receipt and we’ll reimburse you for it.