A workforce revolution is underway with employers wanting to attract and retain the best staff through unparalleled financial benefits. Alliance Leasing, as part of the PayMe Group, is leading the way by assisting employers improve workforce remuneration with no increase in gross salaries or FBT liabilities.
Alliance Leasing is finding that its solutions are being well received in the public and private sector. An area of significant growth is the not for profit sector where Alliance Leasing’s expertise is increasing employees’ “feeling of personal worth” without increasing the institution’s costs.
Alliance Leasing provides a car leasing service by offering a complete end-to-end service for the life of the lease. Over the past eight years we have observed and identified all the choke points in the industry that makes leasing unattractive to employers. Alliance Leasing has developed its service to meets the needs of both employers and employees.
So what is Alliance Leasing’s value proposition?
• Administration is all conducted “in-house” so the same quality assurance is applied to all activities.
• Employers can increase employees’ remuneration at no increase in salaries.
• Our website calculator lists all cars that are available in Australia and is updated weekly with market rates.
• We reimburse any out of pocket expenses you have within three working days.
• We answer all telephone calls within three rings and immediately put you in touch with a consultant who can solve your query.
Revolutionise the way you pay your employees and contact Alliance Leasing today to assist you with restructuring your employee remuneration
Tim Benson Interviews Michael Lindgren, Director of Alliance Leasing
Tim: There is a lot of competition in the novated car leasing space, what makes Alliance Leasing different?
Michael: That’s true, the concept of a novated lease in itself is very sound and there is a lot of competition out there. Some providers are good, some not so. With over 9 years of experience in salary packaging, we pride ourselves on ensuring our clients get the most out of their income, while also assisting the employer in regards to payroll setup and FBT reporting. We also feel we understand the standard of service that hard working Australians deserve. That’s why we know Alliance Leasing will be a leader in the industry.
Tim: Plenty of people have heard about novated car leasing, however how does it really work?
Michael: It’s really quite simple. Instead of paying all your car expenses after you have been taxed, you pay them before you are taxed. Your employer deducts your car lease and running costs, and then taxes you on your original salary less your lease and running costs. This also reduces the tax you pay and increases how much cash you receive each p ayday. No longer do you have to worry about the surprise registration and insurance bills, it’s all taken care of and put aside in a tax effective way.
Tim: What were some of the complaints your contractors have experienced with leasing providers?
Michael: Many providers have a multitude of different fees that we feel just aren’t necessary. We do not charge set ups fees, admin fees, exit fees or excessive management fees. People are often not satisfied with the responsiveness of other providers. We answer all calls within 3 rings during business hours and have a live chat feature on our website. Our clients are reimbursed for any out of pocket expenses on a real time transfer basis, rather than waiting up to two weeks which is sometimes the case. None of the business is outsourced overseas, anytime you call or email us, a person will answer you promptly.
Tim: I believe there is also some criticism around a lack of budget flexibility in some leasing companies, would you care to tell us about that?
Michael: Each month we allocate a set budget for your running costs (fuel, servicing, insurance and so on). Obviously when it comes to fuel, people’s usage will always vary somewhat month to month. Some providers will turn a fuel card off once the month’s allocated budget has been exhausted, yet the client may have several thousand dollars available for other budgets. We are always flexible with our clients, monitoring accounts regularly to ensure fuel budgets are always available while also ensuring there is an adequate surplus for less regular expenses like registration.
Tim: What benefit does an Employer gain by allowing their employees access to novated leasing?
Michael: The benefits for the employer are really about nurturing a strong workplace culture. It’s about retaining quality staff and boosting productivity. By increasing employee benefits you’re basically saying to your people that we value your position in the company and want to reward your loyalty by giving you the tools to get the most out of your pay. Most importantly, there is no Fringe Benefits Tax to pay. The employer will also benefit financially by lowering employees taxable income this also reduces their payroll tax and workers compensation liabilities.
Tim: So if it saves the employee money, it doesn’t cost the employer anything and it’s easy to set up. Why doesn’t every employer offer it to their staff?
There are a variety or common misconceptions and myths associated with leasing. The fact is regardless of income you are guaranteed to receive a benefit through a novated lease. There is always a saving when you pay for something using income before it is taxed and because you don’t pay GST you save roughly 10% on your purchase price and running costs. There is even further saving potential if vehicles are sourced through our national dealer network.
There is simply very little downside to a novated lease! So it’s our job to get out there and educate people on the benefits.
Tim: One of the most misguided comments we hear every day is “Novated Leasing doesn’t work anymore,” what are your thoughts on that.
Michael: The truth is there are few tax deductible items for the regular worker and a Novated Lease is available to most people earning a salary. It’s one of if not the most tax effective ways of reducing your taxable income. It’s all about education and showing people that owning a depreciating assest is not the best option.
Tim: Don’t you have to travel a high number of kilometres to make it worthwhile?
Michael: No. The misconception is you need to spend all your time driving your car in order to achieve the true benefits of a Novated Lease. However due to the changes in the FBT legislation in 2014 pretty much anybody who is running a vehicle using this tax-effective arrangement will benefit.
“WITH OVER EIGHT YEARS OF EXPERIENCE IN SALARY PACKAGING, WE PRIDE OURSELVES ON ENSURING OUR CLIENTS GET THE MOST OUT OF THEIR INCOME”.
This change also greatly assists in the management of Fringe Benefits Tax, which is associated with novated leasing. The employer no longer has to worry about a surprise FBT liability and having to chase the employee to cover the costs, as they didn’t reach their kilometres bracket.
Tim: Don’t you need to be on a high salary to afford repayments?
Michael: The simple answer to this is anytime you can use pre-tax income to pay for something you’re better off. Meaning that anyone who’s employed and running a vehicle will benefit from a Novated Lease, regardless of your annual income. Of course you should always choose a vehicle and package that is affordable and within your budget.
Tim: To a lot of people its sounds too complicated, why should I bother?
Michael: It’s not complicated; instead it’s just different to what we are used to. The great thing about Alliance Leasing is that we will explain it all in easy to understand terms and provide a complete end-to-end solution. We can source a vehicle for you with huge discounts, arrange the best finance and insurance with one quick phone call.
In today’s busy world there is no longer a requirement to go from car yard to car yard comparing vehicle and finance options. It can all be done with one phone call and it gives you time to look over everything before making a decision or an emotional decision like we all have at a car yard at one time in our lives.
Tim: In closing, why should I use Alliance Leasing as my Novated Leasing provider?
Michael: For most of us buying a car is the second biggest financial decision we will have to make. It’s for this reason that Alliance Leasing aims to remove the stress associated with making this purchase and reduces your running costs by thousands of dollars each year. We clearly explain every aspect of the leasing process to ensure you’re kept up to date and informed. We endeavour to create an environment where there are no dumb questions and you feel comfortable and know exactly what you are purchasing.
Holli is an administrative assistant earning $60,000 a year and is quite new to the workforce after recently graduating from University. She is thinking of getting a new Volkswagen Golf as a little reward for completing her studies. After chatting with her colleagues she finds out that her conditions of employment allow her to consider novated leasing and Alliance Leasing is her employer’s preferred supplier.
Holli decides to give Alliance Leasing a call and learns that they take care of everything! They source a great deal on a new Volkswagen Golf including a $3,500 discount and they even bundled all the finance and running costs into one tax effective payment.
Best of all, the total cost was only $136 a week over a 4 year lease including all running costs! This equates to an overall saving of more than $2,260 per year. That means Holli can afford that holiday to Bali as well!
For more information visit our website at allianceleasing.com.au
Or call us on 1300 225 582 Postal Address; PO Box 56 Deakin ACT 2601