Novated Lease Calculator
Calculate your potential tax savings with a novated lease. Electric vehicles are now FBT exempt!
Vehicle Details
ATO minimum for 5 year term: $15,471.5
Your Details
Marginal tax rate: 30%
How Novated Leasing Works
A novated lease is a three-way agreement between you, your employer, and a finance company:
- You choose the car and negotiate the price
- Your employer makes lease payments from your pre-tax salary (salary sacrifice)
- Running costs can also be included, paid with a mix of pre and post-tax dollars
- You save on income tax and GST on the purchase price and running costs
Key benefits:
- Reduce taxable income through salary sacrifice
- GST savings on car purchase (if employer is GST registered)
- Budgeted running costs with no surprises
- EVs exempt from FBT (huge tax advantage)
What is a Novated Lease?
A novated lease is a three-way agreement between you, your employer, and a finance company. Your employer makes lease payments from your pre-tax salary, reducing your taxable income and potentially saving thousands in tax each year.
⚡ Electric Vehicle FBT Exemption
Since July 2022, battery electric vehicles (BEVs) and hydrogen fuel cell vehicles under the luxury car fuel-efficient threshold ($91,387 in FY 2025-26) are exempt from Fringe Benefits Tax. This makes novated leasing significantly more attractive for EVs compared to petrol vehicles.
Important — PHEV change (1 April 2025): Plug-in hybrid electric vehicles (PHEVs) no longer qualify for the FBT exemption from 1 April 2025, except where a binding pre-1 April 2025 commitment continues. From FY 2025-26, only BEVs and FCEVs are eligible.
How Novated Leasing Works
- Choose your vehicle: New or used, any make and model
- Set up the lease: Your employer arranges the lease with a novated lease provider
- Salary sacrifice: Payments come from your pre-tax salary
- Running costs: Fuel, insurance, rego, and servicing can be included
- End of lease: Pay residual, refinance, or trade in
Tax Savings Explained
You save tax in several ways:
- Income Tax: Pre-tax deductions reduce your taxable income
- GST: If your employer is GST registered, you save 10% on the purchase price
- Running Costs: Pre-tax payments mean effective discounts on fuel, servicing, etc.
- FBT Exemption (EVs): Zero FBT means maximum savings for electric vehicles
Residual Values (ATO Minimum)
| Lease Term | Residual % | Example ($55,000 car) |
|---|---|---|
| 1 Year | 65.63% | $36,097 |
| 2 Years | 56.25% | $30,938 |
| 3 Years | 46.88% | $25,784 |
| 4 Years | 37.50% | $20,625 |
| 5 Years | 28.13% | $15,472 |
Who Should Consider a Novated Lease?
- Employees earning $60,000+ who want a new car
- Anyone considering an electric vehicle (huge FBT savings)
- People who want predictable car costs bundled into one payment
- Those in higher tax brackets (30%+ marginal rate)
Popular EVs for Novated Lease
Tesla Model 3
From ~$55,000 - Popular choice, good range
BYD Atto 3
From ~$45,000 - Great value EV
Tesla Model Y
From ~$65,000 - SUV with family space
Hyundai Ioniq 5
From ~$72,000 - Award-winning design