As the world rapidly moves to a more sustainable future, there are opportunities for everyone to reduce environmental impact.
The workplace is a critical part of this equation and savvy businesses are already executing some incredible initiatives.
Electric vehicles (EVs) are emerging as a key lever for businesses to drive down carbon footprints and address climate change. With a growing number of models available, and new and used options eligible, EV policies and strategies will become important differentiators for environmentally conscious businesses.
The second edition of Flare’s National Employee Benefits Index, completed in August 2023, draws on the voices of over 3,000 employed Australians from all industries, tenures, and demographics. It found one in five employees look for a new vehicle each year.
It also tells us that financial pressures are the number one stress factor for Aussie employees, with over half (52 per cent) of the workforce affected, representing an increase of four per cent in six months.
With inflation outpacing wage growth, rising fuel costs and other financial pressures, and the introduction of no Fringe Benefit Tax (FBT) for eligible vehicles only through a novated lease, offering EV options as a benefit presents organisations with a significant opportunity.
Novated leasing lets employees finance a new or used vehicle and pay for car running costs through pre-tax salary.
While novated leasing isn’t the hottest topic or most popular benefit – offered by only 19 per cent of employers – Electric Vehicle Council research shows 40 per cent of Aussies would buy an EV if subsidies assisted the initial purchase price.
This presents a significant opportunity to meet employee demand, boost their earnings package, and potentially their wellbeing too.
Novated leasing is effectively the tax break for this generation, allowing employees to lease a car for personal use, with payments deducted from their pre-tax salary. It’s an attractive way to save on vehicle expenses and reduce their taxable income.
What’s in it for SMBs?
For up-and-coming businesses operating on tighter budgets, splashing out on lavish perks like gym memberships or spa treatments may not be realistic. Fringe Benefits Tax (FBT)-exempt options like novated leasing offer a cost-effective way to bolster pay packages, without the out-of-pocket expenses larger companies can afford.
Amid rising cost of living and financial pressures, employees are looking for ways to save money and they’re excited by the potential benefits of EV ownership. With no FBT on eligible EVs and Plug-in-Hybrid vehicles, employees can save on average $9,000 per year at no cost to their employer, making this an incentive workers will actively seek out.
Novated leasing programs that include EVs help employees reduce their environmental impact, but also position businesses as forward-thinking leaders that care about sustainability. This enhances the overall employer-employee relationship, making the workplace more attractive to environmentally conscious talent. This makes novated leasing a win-win for employers and employees.
Stand out from the crowd
In the current climate, employees are hungrier than ever for real benefits that reduce financial pressure and support work-life balance. The best benefits packages help tackle the specific stressors experienced by Aussie employees.
Novated leasing is not just a financial perk; it’s a strategic move that positions your business as environmentally conscious and employee centric.
It’s an exciting opportunity for businesses to stand out from the crowd and address the workforce’s evolving desires and environmental consciousness, representing a significant win for everyone involved.