Novated Lease Calculator

Electric vehicle FBT exemption · Fortnightly cost · 2026–27 ATO rates

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Running costs, interest rate and base value are auto-filled with market estimates. Open Advanced options below to fine-tune them

Fortnightly Pre-Tax Cost

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Annual Income Tax Saving

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Net Benefit Over 5 Years

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How a novated lease works

A novated lease is a three-way agreement between you, your employer and a finance company. Your employer makes the lease payments from your pay, partly before tax, and the car and its running costs are bundled into that amount. Because part of the cost comes out pre-tax, your taxable income falls.

Electric vehicles and the FBT exemption

As the law stands in the 2026–27 tax year, eligible electric vehicles are exempt from fringe benefits tax, which is what makes an EV novated lease attractive. The benefit is still reported against your income as a reportable fringe benefits amount, and that figure feeds broader income tests such as the Medicare levy surcharge and HECS/HELP repayment income. This calculator carries the amount through, so the net benefit you see already includes those effects.

An estimate is not a quote

The interest rate and running costs here start as market estimates, marked as editable because your real lease will differ. A finance company's quote carries its own rate, its own fees and its own margins, none of which this page can know. Use the calculator to decide whether the structure helps someone in your position; use the quote, edited into the fields above, to judge the actual deal.

The rules applied here are the rules as they stand. Announced changes to the electric vehicle exemption that are not yet law are deliberately not included, so if you are reading this near a rule change, the calculator is the conservative voice in the room, and that is by design.

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Rates last checked against official sources on 15 August 2026. How we check the numbers

Frequently Asked Questions

What is a novated lease?

A three-way arrangement between you, your employer, and a finance company. Your lease payments and running costs are deducted from your pre-tax salary, which can lower your taxable income.

Are electric vehicles exempt from FBT (Fringe Benefits Tax)?

Eligible battery and fuel-cell electric vehicles first held from 1 July 2022, and priced below the fuel-efficient luxury car tax threshold ($91,661 for 2026–27), are exempt from FBT. Plug-in hybrids are excluded from 1 April 2025.

If my EV is FBT-exempt, why does it still affect my HECS and Medicare?

Even when no FBT is payable, the benefit is still a Reportable Fringe Benefits Amount (RFBA). This amount is added to your income for HECS/HELP repayments and the Medicare Levy Surcharge, so those can go up.

What is the Employee Contribution Method (ECM)?

For petrol or diesel cars (not FBT-exempt), you contribute part of the cost from your post-tax salary to reduce the FBT taxable value to nil, so no FBT is payable.

What is a residual (balloon) payment?

The amount owing at the end of the lease, set by ATO minimum percentages based on the lease term (for example, 28.13% for a 5-year lease). At the end you can pay it out, refinance, or trade in.

How accurate is the novated lease calculator?

It uses current ATO 2026–27 rates and market-average estimates for interest and running costs, which you can adjust. For an exact result, open Advanced options and enter the figures from your lease quote.

Who can get a novated lease?

You need an employer who offers salary packaging and agrees to make the deductions from your pay. It is most common in government, health, not-for-profit and larger companies. Permanent full-time and part-time employees are the usual candidates. Casual and contract workers are often declined because the income is not steady enough for a multi-year agreement.

Can I get a novated lease if I am self-employed?

Not as a sole trader, because a novated lease is a three-way agreement that needs an employer to run the salary deductions. If you operate through a company or trust and pay yourself a regular wage through payroll, you may be eligible as an employee of your own company. Other finance options such as a chattel mortgage may suit sole traders better.