Novated Lease Calculator
Calculate tax savings from salary packaging a car through novated lease. Compare EV and ICE vehicles, see FBT exemption benefits. Updated for 2025-26.
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Novated lease inputs
Start with the quick estimate, then switch to advanced inputs if you want to tune running costs, interest rates, or rebates.
Interest Rates (%)
Opportunity cost of using cash (e.g. Mortgage Offset)
Novated lease inputs
Start with the quick estimate, then switch to advanced inputs if you want to tune running costs, interest rates, or rebates.
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.”
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)
Result: $89/week cheaper than a car loan — $13,884 saved over 3 years. The EV FBT exemption makes novated leasing an electric vehicle significantly cheaper than traditional financing.
?How Novated Lease Salary Packaging Works
A novated lease allows you to salary package a car, paying for the vehicle and all running costs (fuel, insurance, servicing, registration) from your pre-tax salary. This reduces your taxable income and can result in significant tax savings — especially for EVs.
Key Benefits
- Pay with pre-tax dollarsCar and running costs from pre-tax salary.
- Save on GST (10%)Your employer claims the GST input tax credit.
- EV FBT exemptionEVs under $91,387 are fully FBT exempt.
- Bundle all car costsFuel, insurance, rego, servicing — all included.
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
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. Always seek professional financial advice before entering into a lease agreement.
Frequently Asked Questions
What is a novated lease?
A novated lease is a three-way agreement between you, your employer, and a finance company that allows you to pay for your car and running costs (fuel, insurance, servicing) from your pre-tax salary, reducing your taxable income.
What is the 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 much can I save with a novated lease?
Savings vary based on your income, the car's value, and whether it's an EV (FBT-exempt). High-income earners can save $10,000–$15,000+ per year on an EV novated lease compared to buying with cash or a car loan.
Can I salary package any car?
Most new and used cars can be novated leased, but to get the FBT exemption, the vehicle must be an eligible EV or PHEV below the luxury car tax threshold. Your employer must also offer novated leasing as a benefit.
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