May 14 2014
2014/15 Federal Budget – Salary Packaging & Novated Lease Analysis
Well, another Budget has been handed down, the first for the newly elected government.
This Remunerator Update will give you details regarding FBT and its impact on Salary Packaging & Novated Leases.
As foreshadowed in our most recent Remunerator News update, there has been no change to the Statutory Rates to calculate the FBT.
The introduction of a Deficit Levy of 2% to the top marginal rate of tax. The FBT rate is aligned to the top marginal tax rate so it will be increased from 1 April 2015 from 47% to 49%.
it will be minimal as the average gross salary who has a Novated Lease is $70,000 and use the Employee Contribution Method (ECM) so the FBT rate is irrelevant.
However, Customers who earn in excess of $180,000 will be slightly affected as the cost of the car will increase by an average of $500. However it should be noted that given the top marginal tax rate will also increase, the with and without packaging comparison will be the same as previously.
Furthermore, people who use the logbook method to calculate their FBT for their cars and Employers who provide cars to their staff under the traditional Fleet Model will see an increase in FBT payable in line with the increase in the FBT Rate.
FBT Exempt Organisations
The Government has made a special concession to these Organisations and announced that the FBT Exempt thresholds of $17,000 and $30,000 will increase to ensure that they are not affected by the increase in the FBT Rate. You will be aware that the amount employees could salary package was affected with the Disability Scheme Levy this year.
Despite considerable media attention in the lead up to the Budget, the Budget Papers are silent on the Meals & Entertainment Benefit so it is business as usual
Remunerator will supply you with further details as they become available.