A novated lease is a three-way agreement between the employee, employer, and finance provider. The employer makes pre-tax payroll deductions and pays the lease on behalf of the employee.

Generally, no. The lease is funded by the employee’s salary package, and the majority of the administration is typically handled by Express Fund. For example, Express Fund manages the setup, calculations, compliance (including FBT where applicable), and ongoing lease administration. This includes budgeting, payments to suppliers, and employee support. For the employer, the role is largely limited to facilitating payroll deductions and remitting payments. There’s no requirement to manage the vehicle, finance, or day-to-day lease logistics, which keeps internal workload low while still offering a valuable employee benefit.

Employer obligations are limited to processing payroll deductions and payments. If the employee leaves, the lease responsibility transfers to either the employee directly or via their next employer.

A novated lease can improve employee retention, enhance salary packaging offerings, and provide a competitive edge in attracting talent. By giving employees access to a tax-effective way to finance and run a vehicle, it adds tangible value to their overall remuneration without increasing base salaries. This type of benefit is often seen as practical and immediate, which can strengthen employee satisfaction and loyalty over time. Additionally, offering novated leasing through a provider like Express Fund positions the business as progressive and employee-focused. It signals that the organisation is willing to invest in meaningful benefits, which can differentiate it in competitive hiring markets and support long-term workforce stability.

The novation agreement ends, and the employee takes over the lease payments or transfers it to a new employer.

Most full-time and part-time employees are eligible, subject to employer approval and finance criteria. Eligibility can vary depending on factors such as employment type, length of service, and the employer’s salary packaging policy. Casual employees or those on probation may have limited access, as lenders typically require stable, ongoing income to approve finance. In addition, the employee must meet credit and affordability requirements set by the finance provider. A provider like Express Fund will usually guide both the employer and employee through eligibility checks, ensuring the structure is compliant and suitable before proceeding.