Who benefits most from novated lease?

Higher income earners (37%+ tax bracket) save the most. If you're on a lower tax rate, the benefits are smaller and may not outweigh the complexity.

What happens if I leave my job?

The lease can transfer to your new employer if they offer novated lease, or you can refinance to a personal car loan. You may also need to payout the lease.

Are electric cars better for novated lease?

Yes! EVs under the luxury car limit ($89,332 in 2024) are exempt from FBT until 2025, making the tax savings even greater.

Novated Lease Calculator

Calculator

Calculate tax savings from salary sacrificing a car through novated lease

Free to useNo data storedAI insightsUpdated: February 2026

A novated lease lets you salary sacrifice a car and running costs, reducing your taxable income. This calculator shows your potential tax savings and effective car cost.

Enter Your Details

Real-World Examples

Mid-Income Novated Lease

$85,000 salary, $40,000 car over 4 years, 15,000km/year, $6,500 annual running costs.

Inputs Used:

salary:85,000car:40,000term:4running:6,500

Annual cost: ~$16,500 from salary. Tax saving: ~$4,800/year. Effective cost: $11,700/year vs $15,000+ buying normally.

Frequently Asked Questions

Glossary

Novated Lease

A three-way agreement between employee, employer, and finance company for salary packaging a car.

Salary Sacrifice

Paying for benefits from pre-tax salary, reducing taxable income.

Fringe Benefits Tax (FBT)

Tax on non-cash employee benefits. Novated leases use ECM or statutory method to minimize.

ECM (Employee Contribution Method)

Post-tax payments that reduce the FBT liability on a novated lease.

Related Tools

Lease vs Buy Calculator

Compare with standard leasing

EV Loan Calculator

EVs have FBT exemption

Total Cost of Ownership

Compare full ownership cost

How to Use

1Enter your annual gross salary
2Add the vehicle price and lease term
3Set your expected annual kilometers
4Include running cost estimates
5See your tax savings and net cost

Key Information

Pre-tax salary payments reduce your taxable income
Running costs (fuel, insurance, servicing) can be included
Higher income = bigger tax benefit
FBT (Fringe Benefits Tax) may apply but there are exemptions

Pro Tips

EVs under the luxury car limit have FBT exemption until 2025
Post-tax contributions reduce FBT
Compare the net cost to buying with a car loan
Check your employer offers novated lease arrangements

Avoid These Mistakes

Not accounting for Fringe Benefits Tax (FBT)
Assuming all the running costs are 'free' (they're salary sacrifice)
Not comparing to buying outright with a regular loan
Changing jobs during the lease (it can follow you, but complicates things)

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026