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Novated Lease Calculator

See what a novated lease costs from your pay, the tax and GST you save, and how it compares with buying the same car with a loan, for an electric or a petrol car.

$

A year, before tax

$

With GST, before on-road costs

More options· 7.48% interest, $3,800 a year running costs
%

On the lease and the loan

$

A year: fuel or charging, servicing, tyres, insurance

$

A year

A novated lease saves you, over 3 years

$17,287

Your take-home pay drops by $425.06 a fortnight, against $1,007.30 for a loan and running costs, and you pay a $28,128 residual to keep the car.

Tax saved a year
$5,201
Lease, a month
$1,060.41
FBT
Exempt

What this means

With a novated lease, your employer pays the lease and running costs from your salary, so you don’t pay income tax on that part, and the lessor claims back the GST on the car (up to $6,353) and on the running costs. At the end you can pay the residual and keep the car.

An electric car under $91,661 is exempt from fringe benefits tax, so everything comes out of your pay before tax. Its value is still shown on your income statement, which counts for the Medicare levy surcharge, HELP repayments and Centrelink.

Next step

How it’s worked out

Car price, less the GST claimed back$54,545
Lease payments and running costs, a year, before GST$16,252
From your pay before tax$16,252
Less tax saved−$5,201
Take-home pay drops by, a year$11,052
Residual to keep the car (46.88%, with GST)$28,128
Novated lease, over 3 years$61,283
Car loan and running costs, over 3 years$78,570

Cost to own the car

Over 3 years, ending with the car
$78,570$39,285$0
Novated leaseCar loan
From your payResidual
Assumptions in this estimate
  • Uses 2026–27 income tax and the Medicare levy, assuming you have private hospital cover (so no surcharge) and no HELP debt.
  • The residual is the ATO’s minimum for a 3 years lease: 46.88% of the price less GST. The loan is at the same rate over the same years, with no deposit, and its running costs are paid from your pay after tax.
  • The electric car exemption covers battery electric and hydrogen cars first used from 1 July 2022 and priced under the $91,661 luxury car tax threshold for fuel-efficient cars. Plug-in hybrids lost it from 1 April 2025, except under arrangements already in place.
  • Not included: the lease provider’s fees and margins, stamp duty and other on-road costs, and what happens if you change jobs, when the lease usually comes back to you.
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How the calculator works

  1. The lease: the car’s price less the GST claimed back, paid off over the term down to the ATO’s minimum residual, at your interest rate.
  2. Your pay: the lease payments and running costs, without GST, come out of your pay. For an exempt electric car it’s all before tax; for other cars, 20% of the price a year comes out after tax so no FBT is due (the employee contribution method).
  3. The comparison: the drop in your take-home pay over the lease, plus the residual to keep the car, against a car loan at the same rate over the same years, with the running costs paid from your pay after tax.

Examples

On 2026–27 tax rates, a 3-year lease at 7.48%, with registration of $800 a year:

Car Salary Running costs Pay drop a fortnight Saving over 3 years
$60,000 electric $100,000 $3,000 $425.06 $17,287
$60,000 petrol $100,000 $5,000 $648.83 $5,832
$40,000 petrol $80,000 $4,000 $455.38 $4,908
$95,000 electric (not exempt) $100,000 $3,000 $912.15 $891

The $60,000 electric car saves $5,201 of income tax a year, and leaves a $28,128 residual to pay to keep it.

Learn more

See our car loan calculator, how much car you can afford, and the pay calculator.

Last updated

Frequently asked questions

Is a novated lease worth it?

Often, especially for an electric car. On a $100,000 salary, a $60,000 electric car over 3 years costs about $17,300 less than buying it with a loan at the same rate, counting the residual you pay to keep it. For a petrol car the saving is smaller, about $5,800 here, because part is paid after tax.

Are electric cars exempt from FBT on a novated lease?

Yes, battery electric and hydrogen cars first used from 1 July 2022 are exempt if they cost no more than the luxury car tax threshold for fuel-efficient cars, $91,661 in 2026–27. Plug-in hybrids lost the exemption from 1 April 2025, except under arrangements already in place.

What is the residual on a novated lease?

The amount left to pay at the end if you keep the car, set by the ATO’s minimum residual values: 65.63% of the price (less GST) for 1 year, 56.25% for 2, 46.88% for 3, 37.5% for 4 and 28.13% for 5, plus GST.

Does a novated lease affect my Medicare levy surcharge or HELP?

An exempt electric car still has a reportable fringe benefit on your income statement, 20% of its price grossed up by 1.8868. It counts towards the income for the Medicare levy surcharge, HELP repayments and Centrelink tests, though not your tax.

How much GST do I save?

The lessor claims back the GST on the car, up to 1/11 of the $69,883 car limit for 2026–27, which is $6,353, and on the running costs such as fuel, charging, servicing and insurance.