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A novated lease packages a car from your pre-tax salary, saves the GST on the purchase and running costs, and — for an eligible electric car — pays no FBT at all. Compare it against buying the same car yourself, with real tax figures for 2026–27. Unlike lease-provider calculators, this one has nothing to sell you.
Gross salary before tax, excluding super.
GST-inclusive. Under a novated lease you don't pay the GST, up to a $6,353 credit.
ATO minimum residual for 5 years: 28.13% of the amount financed.
Running costs: fuel or charging, rego, insurance, servicing and tyres. Lease quotes bundle these; 8–10% is a typical novated finance rate — check your quote.
Leave blank to use the ATO minimum. Enter the residual from your quote if it's higher — a bigger balloon means smaller payments now and a larger lump sum at the end.
Estimated saving with the novated lease
$2,833 a year
≈ $14,163 over the 5-year term
Based on a petrol or diesel car, where FBT is cleared using the employee contribution method. An eligible electric car saves more — tick the electric-car option to model it.
For a petrol or diesel car, $11,000 of the package is paid post-tax under the employee contribution method so no FBT is payable. Only the pre-tax portion saves income tax — which is why the EV exemption changes the maths so much.
A residual of $14,065 (plus GST) is payable to own the car at the end — the same balloon structure is assumed on the buy side, so it doesn't change the comparison. Packaged benefits create a reportable fringe benefits amount that can affect HELP repayments, the Medicare levy surcharge and family payments.
The lease finances $50,000 (the GST-exclusive price — $5,000 GST saved up front) and the whole package runs from pre-tax salary because the car is FBT-exempt.
Every dollar packaged escapes tax at the marginal rate, so the tax saving alone is thousands a year on top of the GST — the reason EV novated leases dominate the market.
A $55,000 petrol car has an FBT taxable value of $11,000 (20% statutory rate), so $11,000 of the package is paid post-tax under the employee contribution method to cancel the FBT.
Only the remainder runs pre-tax. The GST savings still apply, but the tax saving is far smaller — a petrol novated lease is often only marginally ahead of buying outright.
It depends almost entirely on the car and your marginal tax rate. For an eligible electric car the answer is usually yes: no FBT, no GST on the purchase or running costs, and the whole package pre-tax. For petrol and diesel cars the employee contribution method wipes out most of the pre-tax benefit, so the saving is mostly the GST — run the numbers above rather than trusting a provider's quote, and watch the finance rate and bundled running-cost margins, which is where providers make their money.
A battery electric or hydrogen fuel-cell car first held and used on or after 1 July 2022, under the $91,661 fuel-efficient LCT threshold, is exempt from FBT on a novated lease. Lease payments, charging, rego, insurance and servicing all come out of pre-tax salary. Note the value is still a reportable fringe benefit (RFBA) — it doesn't add tax, but it counts towards income tests like HELP repayments and the Medicare levy surcharge. Plug-in hybrids stopped qualifying on 1 April 2025.
The balloon payment — also called the residual — is the lump sum left owing at the end of the lease. The ATO sets minimum residuals so a novated lease is a genuine lease rather than a disguised loan: 65.63% after 1 year, 46.88% after 3 and 28.13% after 5. At the end of the term you pay the residual (plus GST) to keep the car, refinance it into a new lease, or sell the car — if it's worth more than the residual, the difference is yours tax-free.
Those are minimums, not fixed values. Financiers often quote a residual above the ATO floor, which lowers the payments coming out of your salary and raises the lump sum owed at the end. The calculator above takes the balloon percentage as an input, so you can enter the residual from a real quote instead of assuming the minimum. Raising it does not make the car cheaper — it moves cost from your fortnightly package to a single payment years away, and you pay interest on the deferred balance in the meantime.
The risk worth naming: if the balloon is set high and the car is worth less than the residual at the end of the term, you are still liable for the full amount. That's the trade-off a low monthly payment can hide.
Tax figures use 2026–27 resident rates; FBT and GST settings follow the ATO pages below. Compare against a real quote before signing.
This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.
A novated lease is a three-way agreement between you, your employer and a finance company. Your employer makes the lease and running-cost payments out of your salary — mostly pre-tax — and the obligation 'novates' (transfers) with you if you change jobs, back to you.
Because the employer is the one paying, the car is a fringe benefit. For petrol cars the FBT is usually cancelled by a post-tax employee contribution; for eligible electric cars the benefit is FBT-exempt, which is what makes EV novated leases so tax-effective.
The employer also claims GST credits on the purchase price (capped at the car limit) and running costs, so you effectively pay GST-free.
For an eligible EV the whole package — lease payments and running costs — comes out of pre-tax salary with no FBT, plus you save the GST on the purchase (up to the car-limit cap) and on running costs. On a $100,000 salary packaging a $55,000 EV, the combined GST and income-tax saving is typically several thousand dollars a year versus buying the same car yourself.
Often only marginally. The 20% statutory taxable value is usually cancelled with post-tax contributions (the employee contribution method), so most of the package doesn't save income tax — the benefit is mainly the GST savings, which a high finance rate can erase. Run the comparison with the EV toggle off to see the difference.
You pay the residual (balloon) plus GST to own the car, refinance the residual into a new lease or sell the car and keep any amount above the residual tax-free. The ATO minimum residual is 28.13% of the amount financed on a 5-year lease.
The balloon payment, or residual, is the lump sum still owing when the lease ends. The ATO sets a minimum for each term — 28.13% of the amount financed over five years, rising to 65.63% over one year — so the arrangement counts as a genuine lease rather than a disguised loan. This calculator takes the balloon as an input, so you can enter the residual from your actual quote rather than assume the minimum.
A higher balloon lowers the amount coming out of your salary each pay but doesn't make the car cheaper: you're deferring cost to a single payment years away and paying interest on the deferred balance in the meantime. It also carries a real risk — if the car is worth less than the residual at the end of the term, you're still liable for the full amount. A residual close to the ATO minimum keeps that gap smaller.
Yes. Packaged benefits create a reportable fringe benefits amount (RFBA) — even for an FBT-exempt EV. RFBA counts towards the income tests for HELP repayments, the Medicare levy surcharge, family assistance and Division 293, so your repayments can rise even though your taxable income falls.
Battery electric and hydrogen fuel-cell cars first held and used on or after 1 July 2022, priced under the fuel-efficient luxury car tax threshold ($91,661 for 2026-27). Plug-in hybrids stopped qualifying on 1 April 2025 unless a binding commitment predates that.
The lease novates back to you — you keep the car and make the payments yourself (losing the tax benefits) until your new employer agrees to take on the novation. Most large employers and salary-packaging providers support it.
Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.
This calculator exists to show you the arithmetic. It applies published Australian rates, thresholds and formulas to the numbers you enter and shows the working, so you can check it. That is all it does — it produces a number and describes what the number is. It does not recommend anything and it holds no opinion about any financial product.
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This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.