A novated lease pays for a car and its running costs from your pre-tax salary. It saves the most on electric cars, which are currently exempt from fringe benefits tax.
Rates checked against ATO and official sources on 26 September 2026. How we calculate
Results update as you type.
Cost to your take-home pay$429 a fortnight$11,158 a year · about $6,891 a year less than paying from take-home pay
Lease payments
$11,863
Running costs (GST claimed back)
$4,545
Paid from pre-tax salary
$16,408
Reduction in your take-home pay
$11,158
Balloon payment at end of lease (46.88%)
$23,440
Electric cars under $91,661 are exempt from FBT, but $20,755 is added to your income for things like HECS and the Medicare levy surcharge. Proposed changes from 1 April 2027 would reduce the exemption for new leases on cars over $75,000.
An estimate only. Real quotes include fees and insurance options, and lenders set their own rates. Compare at least two quotes.
GST saving: the leasing company claims back GST on the car price (up to the $69,883 car limit in 2026–27, so up to $6,353) and on running costs.
Pre-tax payments: lease and running costs come out before tax, which lowers your taxable income.
Electric cars priced under the luxury car tax threshold ($91,661 in 2026–27) are exempt from FBT, so everything can be paid pre-tax.
Petrol and hybrid cars attract FBT. Most leases avoid it by taking 20% of the car’s price from your after-tax pay (the employee contribution method), which reduces the saving.
Balloon: at the end of the lease you owe a residual set by the ATO, from 65.63% (1 year) to 28.13% (5 years) of the car’s cost.
Plug-in hybrids lost the FBT exemption for new leases from 1 April 2025. The government has proposed reducing the EV exemption for new leases on cars over $75,000 from 1 April 2027.
For an electric car under the LCT threshold it usually is, because of the FBT exemption. For petrol cars the saving is smaller and depends on your tax rate and the fees in the quote.
What happens at the end of the lease?
You can pay the balloon and keep the car, sell it, or refinance the balloon into a new lease.
Does a novated lease affect HECS?
An FBT-exempt electric car still adds a reportable fringe benefit to your income, which can increase HECS repayments and affect the Medicare levy surcharge.