How HECS/HELP debt affects your novated lease savings
Source: ATO
Salary sacrificing a car reduces your taxable income, which can lower compulsory HELP repayments — an often-overlooked saving.
When you salary sacrifice into a novated lease, your taxable income decreases. For employees with a HECS-HELP or other study loan debt, this can reduce your compulsory repayment amount — creating an additional saving beyond income tax and GST benefits.
HELP repayments are calculated as a percentage of your repayment income, which includes taxable income plus reportable fringe benefits, reportable super, and net investment losses. While RFBA from your car benefit is added back, the pre-tax salary sacrifice still reduces your taxable income component.
The saving is modest compared to income tax benefits — typically a few hundred dollars per year — but it's worth factoring in. Our calculator includes a HECS toggle that adjusts estimates for employees with study loan debt.
Note that reducing HELP repayments means your loan balance decreases more slowly. Whether this is a net positive depends on your priorities — lower total vehicle cost now versus faster debt repayment. Consider your overall financial position before deciding.
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