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Salary Sacrifice for your Bike?

Discussion in 'General Motorcycling Discussion' started by Doggy, May 15, 2006.

  1. Ok the story is that here at work our new EB has finally been done and we made sure there was the clause in there re Salary Sac. Now it's in they say to us "Yep it's ok, but! you have to find the administrator yourself" :mad:

    What I am looking for is an aministrator which looks after S/S for stuff like Rent, Cars, Laptops and bikes etc. Anyone out there happy with their S/S administrator? If so which one?


  2. I use NLC for my cars and they seem pretty good, take care of the lot for me. Don't know if they do bikes but worth a shot.

  3. S/S Bikes? Good luck! :rofl:

    Motorcycles are excluded, as they are not considered motor vehicles for FBT purposes AFAIK (very happy to be proven wrong though)
  4. Thats not what I wanted to hear :evil: That means all I'll be doing it for is rent and a Laptop every now and then.

    Bugger! :?
  5. Unfortunately, this is correct, and means that concessional FBT allowed for cars is not available for bikes.
  6. Used to code thier website quite a few years ago.
  7. You can salary sacrifice anything legal it is up to the employer, so you can S/S a motorbike, you will just pay FBT as the government consider it a fringe benefit.

    The good thing about S/S for a car [which would be similair for a bike] is that it is a single monthly amount covering everything. This is one of the main reasons I have both my cars under lease.

    But I think what you mean is that there are only certain items that you can S/S without attracting tax ie FBT.
  8. from http://www.ato.gov.au/individuals/content.asp?doc=/content/24632.htm&page=7&H7

    Salary sacrifice arrangements for employees

    Printable version
    Exempt benefits

    A number of benefits are exempt from FBT. Expense payment, property or residual benefits arising for the following items commonly provided in salary sacrifice arrangements are exempt benefits.

    * A notebook computer, laptop computer or similar portable computer. The exemption for portable computers is limited to the purchase or reimbursement of one computer per year per employee.
    * A mobile phone or car phone. A benefit arising for a mobile phone or car phone will attract the exemption only if the phone is primarily for use in an employee's employment.
  9. So would the consideration be then, is the FBT less than the income tax one would pay? Is this where the benefit could still lie?
  10. Spot on dude,

    The only problem you face is that with the exception of cars FBT is calculated at 48.5% [going to 46.5% 1st June] so you are in effect paying top marginal rate.

    With cars there are two ways of working out FBT and it normally works out at between 11 and 30% of the total cost of running the car. This figure depends on a whole bunch of parameters but many kms you do a year.

    With the recent reductions in PAYG tax rates having a car on a novated lease is getting less and less attractive. :?
  11. Not correct. FBT is calculated on the purchase price of the vehicle, which may or may not include GST, depending on your particular circumstances.

    FBT rates drop, as you suggest, from 30% down to 7% based on km/year travelled. The more kays, the less FBT.

    FBT is not paid on the running costs of the vehicle.

    FBT for bikes is/was worked out differently. The more kays you did, the more FBT you paid. Where I work we tried to get it in but the company wasn't real keen and the fleet management company wasn't either. Another site did have 'em. What some of the guys were doing was to buy expensive bikes, say Harleys or exotic Ducatis or whatever, then putting them in storage. 2 years down the track they'd pay out the residual and flog the bikes for a hefty profit.

    The last time that I looked, the ATO had provisions there for bike S/S. But that was a year ago. I do not know what the rules are today, if they're different or not.

    Good luck to the OP in finding a fleet management co. Remember, it's probably best if you all sign up with the same company. Asa fleet you may get a better deal, perhaps even fleet discounts when purchasing your vehicle.

    Remember too, that since the new tax scales will be different come July, there won't be as great an incentive to novate lease a car or a bike.

    For us, we're seeing a significant rate drop. A lot of us have already decided that it may not be worth it any more to lease vehicles. I doubt that I will.

    What I may do, though is to do an Associate Lease. It's where you lease your partner's car off her or him, and pay them an income. It's not a bad way of splitting income. Of course, if your partner works and earns a reasonable salary then the tax benefit is probably nil, other than all running costs are pre-tax (eg: petrol at $1.40/litre is worth to you nett, around 85 cents if you're in the top tax bracket).
  12. Yep I was not clear I pay about 6% of total running costs, but this is based on 7% of my cars value.
  13. NLC do bikes. OR they used to. The Blade is through them.
  14. As already mentioned earlier, it's now less effective to novate (lease) a car (or a bike if you can) since the tax rates are falling and the thresholds increasing.

    Unless you earn over $150,000 of taxable income then you save much less than before and you need to do at least 25,000km (for a car anyway) to make it worth while.

    Someone mentioned Associate Lease. Now that would probably be the most cost effective if you could to that for a bike. Speak to a good accountant ( :LOL: if you can find one) to advise you.


    p.s. If you find someone who can do all the paperwork for an Associate Lease please let us all know. It could be one way I could get my Triumph 675 :grin:
  15. Andrew,

    Your employer should be taking control of this, not leaving it up to you to do the legwork. Salary packaging arrangements can be very effective, but it's up to the employer to drive and support them.

    I think you'll find that motorcycles are not motor vehicles for FBT purposes and consequently do not enjoy the FBT concessions available to motor vehicles. Bike-related benefits will be treated as "residual" fringe benefits, and if your employer recoups the FBT from you, salary sacrificing in this instance is not effective.

    I note that you mention rent in your post, and I would suggest that FBT will apply to rent unless you're living away from home as a consequence of your employment. Your employer should be in a position to advise you on things like this.
  16. Thanks for the replies everyone.

    Bikes are out, and cars are pretty much too as I don't earn that much :cry:

    Rent is ok to sacrifice out here because we are classified as a remote area according to ATO rules. If I lived in Bris then nope but out here it's ok.