What is a novated lease in Australia?

A novated lease is a three-way agreement between you, your employer, and a finance company. Your employer makes car lease payments from your pre-tax salary, reducing your taxable income. The lease covers the car purchase price and can include running costs like fuel, insurance, registration, servicing, and tyres.

Are electric vehicles FBT exempt on a novated lease?

Yes, electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) with a value at or below $91,387 (the luxury car tax limit for fuel-efficient vehicles) are exempt from Fringe Benefits Tax until 31 March 2027. This makes EVs significantly cheaper to salary sacrifice than petrol or diesel cars.

How much can I save with a novated lease?

Savings depend on your salary, the car price, and whether it's an EV. On an $85,000 salary with a $45,000 EV, you could save $10,000-$15,000 over a 3-year lease through GST savings, reduced income tax, and $0 FBT. Higher income earners in higher tax brackets save more.

What happens to a novated lease if I change jobs?

If you change jobs, your novated lease can be transferred to your new employer (novated again). If your new employer doesn't offer novated leasing, you can make the payments yourself until you find an employer that does, or pay out the lease early.

What is the GST saving on a novated lease?

When you buy a car through a novated lease, you don't pay GST on the purchase price or running costs. On a $50,000 car, that's approximately $4,545 in GST savings alone. This is because the finance company claims the GST input credit.

Novated Lease Calculator

Calculate your novated lease savings including GST, income tax, and FBT. Compare EV vs petrol costs with 2025-26 tax rates.

Last verified: 1 July 2025

Novated Lease by Car Model

Electric Vehicles (FBT Exempt)

Tesla Model 3 Tesla Model Y BYD Atto 3 BYD Seal BYD Dolphin BYD Shark 6 MG ZS EV MG 4 EV Volvo EX30 Volvo XC40 EV Hyundai Ioniq 5 Hyundai Ioniq 6 Hyundai Kona EV Kia EV6 Kia EV9 Kia Niro EV Polestar 2 Cupra Born GWM Ora

ICE & PHEV

Toyota RAV4 Toyota Corolla Cross Mazda CX-5 Ford Ranger Mitsubishi Outlander PHEV BYD Tang

Novated Lease Savings by Salary

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Guides & Comparisons

EV vs Petrol Novated Lease Buying vs Novated Lease BYD vs Tesla Novated Lease Cheapest EV Novated Lease Best EV Under $50,000 Best EV Under $40,000 Novated Lease vs Car Loan Salary Sacrifice a Car How a Novated Lease Works FBT Exemption for EVs

Salary Sacrifice into Super: How It Works & How Much You Save (2025-26)

Learn how salary sacrificing into superannuation works in Australia. Calculate your tax savings, understand the contribution caps, and see if it is worth it for your income level.

FBT Exemption for Electric Vehicles 2026 — Everything You Need to Know

Complete guide to the FBT exemption for electric vehicles in Australia 2026. Eligibility rules, the $91,387 luxury car limit, PHEV changes, employer requirements, and how much you save.

Novated Lease on an EV in Australia 2026: Complete Guide to Saving Thousands

How to get an electric vehicle on novated lease in Australia 2026 with full FBT exemption. Worked example on an $80K salary with a $45K BYD Atto 3 shows you could save $7,000–$9,000 per year.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.