Novated Lease Calculator
Compare the cost of a Novated Lease vs Car Loan vs Cash.
See how much you can save with the EV FBT Exemption.
Example: Tesla Model 3 vs Car Loan
$58,000 Electric Vehicle, 3-year lease, $98,000 annual salary
💰 Cash Purchase
🏦 Car Loan
⚡ Novated Lease (EV)
💰 Savings: $89/week compared to a car loan, or $13,884 over 3 years. The EV FBT exemption makes novated leasing an electric vehicle significantly cheaper than traditional financing.
Your Details
Interest Rates (%)
Opportunity cost of using cash (e.g. Mortgage Offset)
Savings vs Car Loan
Total estimated savings over the lease term compared to a standard car loan.
Savings vs Buying Outright
Total estimated savings compared to buying outright with cash (accounting for offset interest).
Detailed Comparison
| Comparison | Novated Lease | Car Loan | Cash (Offset) |
|---|---|---|---|
| Weekly Cost | $413 | $529 | $520 |
| Total Cost (Term) | $64,376 | $82,491 | $81,062 |
Key Benefits
- GST Savings (Car + Running)$6,867
- Income Tax Savings$17,499
End of Lease
To own the car at the end of the lease, you must pay this residual amount (including GST). You can also choose to refinance or sell the car.
"A novated lease allows you to pay for your car and running costs from your pre-tax salary."
EV vs Petrol: Which Saves More with Novated Lease?
The FBT exemption for electric vehicles makes a huge difference. Here's a real comparison:
| Feature | Electric Vehicle (EV) | Petrol/Diesel (ICE) |
|---|---|---|
| FBT Status | ✓ Exempt (if under $91,387) | ✗ FBT applies (~20% of value) |
| Weekly Cost (Example) | $223/week | $312/week |
| Fuel/Charging Costs | ~$15/week (home charging) | ~$80/week (petrol) |
| Servicing Costs | Lower (fewer parts) | Higher (oil changes, etc.) |
| 3-Year Savings | Save $13,884 | Baseline |
Key Insight: The FBT exemption alone saves you ~$4,000-$6,000 per year on an EV novated lease compared to a petrol car. Combined with lower running costs, EVs are significantly cheaper.
Real-World Scenarios
Public Servant (APS 6, $98k salary)
Car: Tesla Model 3 ($65,000)
Lease term: 3 years
Weekly cost: $240 (vs $330 car loan)
Annual saving: $4,680
✓ Perfect for daily commute, FBT-exempt
Healthcare Worker ($75k salary)
Car: BYD Atto 3 ($48,000)
Lease term: 4 years
Weekly cost: $165 (vs $220 car loan)
Annual saving: $2,860
✓ Affordable EV, great for shift work
Corporate Employee ($120k salary)
Car: Polestar 2 ($70,000)
Lease term: 3 years
Weekly cost: $260 (vs $360 car loan)
Annual saving: $5,200
✓ Premium EV, maximum tax benefits
Petrol Car Comparison ($90k salary)
Car: Toyota RAV4 Hybrid ($55,000)
Lease term: 3 years
Weekly cost: $285 (FBT applies)
vs EV equivalent: $210/week
⚠ FBT adds ~$75/week to cost
Good to Know
Everything you need to understand about Novated Leasing and FBT exemptions.
What is a Novated Lease?
A novated lease is a three-way agreement between you, your employer, and a finance company. It allows you to pay for your car and its running costs (fuel/charging, insurance, servicing) from your pre-tax salary, potentially reducing your taxable income.
EV FBT Exemption
From 1 July 2022, eligible electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) are exempt from Fringe Benefits Tax (FBT) if the car's value is below the Luxury Car Tax threshold ($91,387 for 2024-25). This makes novated leasing an EV significantly cheaper.
How this calculator works
This calculator estimates your weekly and total costs under three scenarios:
Includes tax savings, GST savings on car & running costs, and FBT implications.
A standard personal car loan paid from your post-tax salary.
Models "borrowing from yourself" at your Offset Rate to capture opportunity cost.
Note on Accuracy
This calculator provides an estimate based on the inputs provided. Actual costs may vary depending on your specific lease agreement, exact tax circumstances, and changes in legislation. The "Cash" option uses an amortization method to ensure a fair comparison against the "Car Loan" option.
Other Salary Sacrifice Options
Explore other ways to reduce your tax through salary packaging
Superannuation
Boost your retirement savings and reduce tax by salary sacrificing to super.
Healthcare Professional
Package up to $9,010 in living expenses FBT-free if you work in healthcare.
Work Equipment
Package laptops, phones, and other work equipment with pre-tax dollars.
Note on Accuracy
While this calculator provides a detailed estimate based on standard ATO rates and typical lease structures, actual savings will vary depending on your specific lease provider's fees, your employer's policies, and your personal financial situation. Always seek professional financial advice before entering into a lease agreement.