3/31/2024 0 Comments What is ecm in car![]() Tax Savings – You can access significant income tax savings by paying for some of your car’s running costs from your pre-tax income through your employer. This method of salary packaging is called the Employee Contribution Method (ECM) and Lendly will calculate the ratio of pre and post-tax deductions to offset your FBT liability and maximise your PAYG income tax benefit. The post-tax deductions are used to offset the FBT liability payable on the car. If your taxable salary is less than $180,000 per annum, Lendly will structure your salary package using a combination of pre and post-tax deductions. A novated lease is tax effective because in most cases, your income tax savings will be greater that the FBT payable on your car. The amount of FBT levied on your novated lease is calculated using the statutory formula method and is mainly determined by the value of the car you choose to package. To offset some of this reduction in income tax, the Australian Tax Office (ATO) levies another tax called FBT on the novated lease that your employer provides to you. A novated lease allows you to reduce your taxable income, therefore reducing your PAYG income tax.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |