Novated Lease Calculator 2026–27
See what a novated lease would cost from your pay, and how much you'd save compared with buying the car yourself.
Printed from ClearCalc (clearcalc.com.au/novated-lease-calculator/). Estimates only, not financial advice.
How a novated lease works
A novated lease is a three-way agreement between you, your employer and a finance company. Your employer pays the lease and your car's running costs from your pay, partly before tax. You get to use the car as your own, and at the end of the lease you pay the residual, refinance it, or trade the car in.
The savings come from three places: paying with pre-tax pay, getting GST back on the purchase price (up to $6,353) and running costs, and, for electric cars, the FBT exemption.
The electric car FBT exemption
Battery electric and hydrogen cars that cost less than the luxury car tax threshold for fuel-efficient vehicles ($91,661 in 2026–27) and were first used from 1 July 2022 are exempt from fringe benefits tax. That means the whole lease and running costs can come from pre-tax pay. Plug-in hybrids lost the exemption for new leases from 1 April 2025.
The 2026–27 Budget announced that from 1 April 2027, only electric cars under $75,000 will stay fully exempt, with a partial discount for cars between $75,000 and the threshold, and the exemption ending from 1 April 2029. Existing arrangements are expected to be protected. Check the details before you sign a new lease.
Petrol, diesel and hybrid cars
For other cars, the taxable value under the statutory formula is 20% of the car's price each year. Most providers use the employee contribution method: you pay that amount from after-tax pay, which reduces the FBT to zero, and the rest comes from pre-tax pay. The saving is smaller than for an electric car, but often still worthwhile on higher incomes.
Minimum residual values
| Lease term | Residual (% of cost) |
|---|---|
| 1 year | 65.63% |
| 2 years | 56.25% |
| 3 years | 46.88% |
| 4 years | 37.50% |
| 5 years | 28.13% |
Frequently asked questions
Is a novated lease worth it for an electric car?
Often yes. With the FBT exemption, the lease, charging, insurance and servicing can all be paid from pre-tax pay. On a $120,000 salary and a $60,000 car, the saving can be several thousand dollars a year compared with a car loan.
What happens if I change jobs?
The lease goes back to you. You can ask your new employer to take it over, or keep paying it yourself from after-tax pay, which loses the tax benefit.
Does a novated lease affect my HECS or Centrelink?
An FBT-exempt electric car still creates a reportable fringe benefit, which counts for HECS-HELP repayments, the Medicare levy surcharge and some government payments.
Last reviewed October 2026. This calculator gives an estimate for general information only. Check important figures with the relevant government agency or a licensed professional.