Novated Lease Explained: A Complete Australian Guide for 2026
Understand how a novated lease works in Australia, who qualifies, and how salary sacrifice can save you thousands in tax every year.
12 May 2026 12 min read
Read article Trusted by 10,000+ AustraliansAustralia's Most Accurate
Australia's Most Accurate
Novated Lease Calculator
Work out your lease savings in minutes. Compare salary sacrifice options, discover tax benefits and make confident decisions about your next vehicle.
Maximum Tax Savings
Precise tax benefits with salary sacrifice. Save thousands annually on your vehicle costs.
EV Specialists
Zero FBT on eligible EVs. Compare Tesla, BYD, Hyundai and more with our EV-aware calculator.
Built for Australia
Accurate FBT, ATO tax brackets and residual values for every state and territory.
Trusted by Australians looking for smarter car finance
Thousands of Australians use our tool to uncover real savings on their next vehicle through novated leasing.
10,000+
Happy customers
$45M+
Tax savings calculated
500+
Vehicle models
4.9★
Customer rating
Accurate calculations
Built on current Australian tax laws, FBT rates and residual values.
All vehicle types
Cars, EVs, utes and commercial vehicles with realistic pricing.
Expert support
Australian-based team with deep novated lease know-how.
Always free
No hidden fees, no sign-up — just accurate results.
100%
Australian tax compliant
Zero
FBT on eligible EVs
500+
Vehicle models
Free
Always
Understanding novated leasing in Australia
A novated lease is a three-way arrangement between you, your employer and a finance company that lets you lease a vehicle using your pre-tax salary — potentially saving thousands in tax.
How salary sacrifice works
Your employer deducts lease payments from your pre-tax salary, reducing taxable income. The result: less income tax and meaningful annual savings on your vehicle.
Key benefits
- Reduce taxable income
- Bundle running costs
- GST savings on the purchase price
Important terms to know
Residual value
The set future value of your vehicle at lease end — also called a balloon payment.
FBT
Fringe Benefits Tax paid by your employer. Eligible EVs are FBT-exempt under current rules.
Balloon payment
Final lump-sum payment due at lease end. You can pay, refinance or trade in.
Salary packaging
Swapping part of your salary for non-cash benefits to reduce taxable income.
| Option | Pros | Cons |
|---|---|---|
| Novated lease | Tax benefits, EV savings, lower upfront cost, bundled running costs | Commitment period, possible FBT on non-EV vehicles |
| Car loan | Own from day one, freedom to sell | Higher repayments, no tax savings, separate running costs |
| Outright purchase | No ongoing debt, full ownership | High upfront cost, no tax benefits, cash flow impact |
Why a novated lease feels like a cheat code
Four simple wins that stack up every payday
A novated lease takes the price of a car and quietly chips away at it from four directions at once — tax, FBT, GST and bundled running costs. Hover the cards to see them lift in 3D.
Pre-Tax Power
Your lease is paid before tax — like getting a discount on every payment.
Zero FBT on EVs
Eligible electric cars skip Fringe Benefits Tax entirely under current ATO rules.
All-In-One Budget
Fuel, insurance, rego, tyres and servicing bundle into one easy monthly payment.
GST Savings
You don't pay GST on the vehicle's purchase price — instant 10% saving up front.
Try our free novated lease calculator
Get instant, accurate calculations tailored to Australian tax law. See potential tax savings, monthly repayments and take-home pay impact in real time.
Open the calculatorWhy Australians choose our calculator
Built specifically for Australian tax law with the most accurate calculations we can deliver.
100%
Australian tax compliant
Updated for current ATO brackets and FBT guidelines
Zero
FBT on eligible EVs
EV incentives and exemptions applied automatically
500+
Vehicle models
Toyota, Tesla, Ford, Hyundai, BYD and more
Free
Always free
No hidden fees or premium features
Zero FBT on eligible EVs
EV Novated Lease Calculator — save more with electric vehicles
Electric vehicles unlock the largest novated lease savings in Australia. Eligible EVs are FBT-exempt, meaning maximum tax benefits while you drive a cleaner car.
$0
FBT on eligible EVs
Eligible EVs under the LCT threshold are FBT-exempt under current rules.
70%
Lower fuel costs
Electricity costs less than petrol, plus reduced servicing.
0
Direct emissions
Lower your carbon footprint while saving money via salary sacrifice.
Example: Tesla Model Y vs Toyota Corolla
Monthly lease$1,247$606
FBT (annual)$0$1,454
Annual tax savings$4,861$2,364
Annual fuel$800$2,400
Despite a higher purchase price, the Tesla Model Y can offer better overall value thanks to the EV FBT exemption and lower running costs — making it a strong novated lease candidate.
Popular EV models for novated leasing
Tesla Model 3
From $65,400
BYD Atto 3
From $48,011
Hyundai IONIQ 5
From $71,900
MG ZS EV
From $46,990
Calculate your novated lease by car brand
Different brands have different residual values, running costs and incentives — our calculator handles all of them.
Toyota
Australia's most popular brand with reliable models perfect for novated leasing.
Popular models
CorollaCamryRAV4Prado
Calculate for Toyota Tesla
Zero FBTPremium electric vehicles with zero FBT and maximum tax savings.
Popular models
Model 3Model YModel SModel X
Calculate for Tesla Hyundai
Strong warranty and a growing EV range at competitive lease rates.
Popular models
i30TucsonIONIQ 5Santa Fe
Calculate for Hyundai Ford
Strong commercial options and popular family SUVs.
Popular models
RangerTerritoryMustang Mach-EFocus
Calculate for Ford BYD
Zero FBTLeading Chinese EV maker with FBT-exempt electric vehicles.
Popular models
Atto 3DolphinSealTang
Calculate for BYD Mazda
Reliable Japanese engineering with strong resale values.
Popular models
CX-5Mazda3CX-9MX-5
Calculate for Mazda Can't find your preferred brand?
Our calculator supports every vehicle brand sold in Australia, including luxury, commercial and specialty vehicles.
BMWMercedesAudiVolkswagenNissanHondaSubaruIsuzuMitsubishiKia
Salary sacrifice calculator — see your take-home pay
Understand exactly how salary sacrificing affects take-home pay and discover the tax benefits of pre-tax vehicle payments.
Pre-tax (salary sacrifice)
- Payments deducted before income tax is calculated
- Reduces your taxable income
- A lower tax bracket may apply
- Includes GST savings on the vehicle purchase
- Bundled running costs (fuel, insurance, servicing)
Post-tax (traditional car loan)
- Payments made from after-tax income
- No reduction in taxable income
- Full tax rate applies to your salary
- No GST savings on purchase
- Running costs paid separately
$80,000 annual salary
With novated lease
- Gross salary
- $80,000
- Novated lease
- -$15,000
- Taxable income
- $65,000
- Take-home pay
- $51,733
Without novated lease
- Gross salary
- $80,000
- Taxable income
- $80,000
- Take-home pay
- $61,433
- Less car payments
- -$15,000
- Net available
- $46,433
+$5,300annual benefit
$100,000 annual salary
With novated lease
- Gross salary
- $100,000
- Novated lease
- -$20,000
- Taxable income
- $80,000
- Take-home pay
- $61,733
Without novated lease
- Gross salary
- $100,000
- Taxable income
- $100,000
- Take-home pay
- $76,433
- Less car payments
- -$20,000
- Net available
- $56,433
+$5,300annual benefit
Understanding lease repayments
Learn how balloon payments, residual values and lease terms shape your monthly repayments.
3 year lease
Higher monthly, lower balloon
$1,067/mo
$28,125 balloon
4 year lease
Balanced option
$695/mo
$22,500 balloon
5 year lease
Lower monthly, higher balloon
$597/mo
$16,875 balloon
ATO residual value schedule
- 1 year lease65.63%
- 2 year lease56.25%
- 3 year lease46.88%
- 4 year lease37.50%
- 5 year lease28.13%
Things to consider
- Depreciation: if your vehicle drops in value faster than expected, you may owe more than its trade-in value.
- Kilometre limits: exceeding agreed limits can attract additional charges.
- Early termination: breaking the lease early typically incurs penalty fees and an immediate balloon payment.
Calculate your novated lease in 3 simple steps
Get accurate calculations in minutes with our easy-to-use Australian calculator.
01
Enter your details
Add vehicle price, salary and lease term. Choose EV, hybrid or petrol.
- Vehicle price and type
- Annual salary
- Lease term
- Running cost estimate
02
Review tax settings
We automatically apply your tax bracket, current FBT rates and EV exemptions.
- Australian tax brackets
- FBT calculation
- EV exemption
- GST savings
03
See your savings
Get instant results with monthly payments, tax savings and take-home pay comparison.
- Monthly lease payment
- Annual tax saving
- Take-home pay impact
- Total cost comparison
Try now — free calculator
No sign-up required • Instant results • 100% Australian tax compliant
What Australians are saying
Real stories from Australians who've found meaningful savings through novated leasing.
Saved well over $4,000 a year on my Tesla Model 3 through novated leasing. The zero FBT on EVs made it an easy call — this calculator helped me see the savings before I committed.
Sarah Mitchell
Marketing Manager, Sydney
The calculator matched my actual lease costs. My RAV4 saves me roughly $3,200 a year in tax and bundling running costs makes budgeting much easier.
David Chen
IT Consultant, Melbourne
As a teacher, every dollar matters. The novated lease on my i30 has reduced my taxable income noticeably — and I knew the numbers before approaching providers.
Emma Thompson
Teacher, Brisbane
Switched from a car loan to a novated lease after using this calculator. The tax savings on my Ranger are real and the bundled maintenance is peace of mind.
Michael Rodriguez
Project Manager, Perth
Trusted by employees at Australia's leading companies
Commonwealth BankTelstraWoolworthsBHPQantasNABWestpacRio TintoColesAustralia PostAGLOrigin Energy
4.9★
Customer rating
10,000+
Calculations completed
$45M+
Tax savings calculated
500+
Vehicle models supported
Latest from the blog
View all articles Learn before you lease
Plain-English guides written for Australians — explained so clearly even a six-year-old gets the idea.
EV Novated Lease and the FBT Exemption: How Much Can You Really Save in 2026?
Electric vehicles under the LCT threshold are FBT-exempt in Australia. Here is how the EV novated lease works and how to maximise your savings.
28 Apr 2026 11 min read
Read article Novated Lease vs Car Loan: Which Saves You More in 2026?
A side-by-side breakdown of novated lease versus traditional car loan for Australian salary earners, including tax, running costs and flexibility.
10 Apr 2026 10 min read
Read article Frequently asked questions
Answers to the most common questions about novated leasing in Australia.
It often is for employees earning over $50,000 — savings come from reduced income tax, GST and bundled running costs. Use our calculator to see your specific benefit.
Ready to see your novated lease savings?
Join thousands of Australians who've discovered meaningful tax savings through novated leasing.
Calculate now