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Novated Lease Calculator Australia

Calculate your true fortnightly cost, tax saving and FBT liability — plus compare novated lease vs buying outright. EV FBT exemption included.

2025–26 FBT rate 47% | EV FBT exempt (eligible models) | GST saving included

🚗 Novated Lease Details

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Novated Leasing in Australia 2025: How the Tax Saving Works

A novated lease is a three-way arrangement between you, your employer and a finance company. Your employer makes lease payments from your pre-tax salary, reducing your taxable income and saving you income tax. The leasing company handles all car running costs (fuel, insurance, registration, servicing) through a single fortnightly payment from your pre-tax salary.

EV FBT Exemption — The Game Changer

Since July 2022, eligible electric vehicles priced below the luxury car tax threshold ($89,332 in 2025-26) are exempt from Fringe Benefits Tax (FBT) under a novated lease. This means the normal FBT liability is zero — dramatically increasing the tax saving and making EV novated leases one of the most tax-effective ways to get a new car in Australia.

How Novated Lease Tax Saving Is Calculated

Without FBT exemption: your employer pays the lease from pre-tax salary (saving income tax) but must pay FBT at 47% on the taxable value. The employee-contribution method (ECM) can be used to offset FBT using after-tax contributions. With EV FBT exemption: no FBT applies — 100% of the lease payments come from pre-tax salary, maximising the tax saving.

Estimates only. Novated lease tax outcomes depend on individual circumstances. Consult your employer's salary packaging team or a licensed adviser.

Frequently Asked Questions

How much can I save with a novated lease in Australia?
Savings depend on vehicle price, salary, and vehicle type. For a $65,000 EV on a 3-year lease, someone on $120,000 salary typically saves $8,000–$12,000 in tax over the lease term compared to buying with after-tax money. The GST saving on the vehicle purchase (saving 10% on purchase price) adds further value.
Are electric vehicles FBT exempt in Australia in 2025?
Yes — eligible EVs priced below the luxury car tax threshold ($89,332 in 2025-26) are exempt from FBT when provided through a novated lease. This applies to battery electric vehicles (BEVs). Plug-in hybrid electric vehicles (PHEVs) were FBT exempt until 31 March 2025 — the FBT exemption for PHEVs ended in the 2025 budget unless already in an existing novated lease arrangement.
What is the luxury car tax threshold for novated leases in 2025?
The luxury car tax (LCT) threshold for fuel-efficient vehicles (including EVs) in 2025-26 is $89,332. For all other vehicles it is $76,950. Vehicles above these thresholds are subject to LCT at 33%, which flows through to the lease cost. The EV FBT exemption only applies to vehicles below the LCT threshold.

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