About the automotive leasing and salary packaging industry
Workplace motor vehicles typically fall into one of two categories:
- Tool-of-trade vehicles – commercial vehicles essential to the operation of an organisation; or
- Benefit vehicles – passenger vehicles provided to employees by way of salary packaging.
NALSPA members provide the following services to organisations and employees:
- Fleet management services – from procurement to sale, including management of leasing, insurance, finance, and maintenance arrangements.
- Salary packaging services – management of monies from employers on account of employees, leasing, insurance and maintenance arrangements.
A substantial proportion of the Australian workplace motor vehicle fleet is administered by NALSPA members.
Fringe Benefits Tax applies to workplace motor vehicles via either the operating cost method or the statutory formula method.
The FBT arrangements for employer-provided and salary sacrificed motor vehicles have been in place since 1986 and are a standard feature of employment agreements, providing a means and incentive for employees to purchase a new vehicle when they may not otherwise be able to do so. Such FBT arrangements are also a major contributor to new car sales and the wider automotive value chain.
The major users of FBT arrangements for motor vehicles typically include charity employees, police officers, teachers, Federal, State and Local Government workers and employees in the public health and aged care sectors.