Enter the car's price, type and lease term with your salary to see the lease payment, what comes out of your pay before and after tax, the tax and GST you save on an electric or petrol car, and how it compares with a car loan.
How to use the novated lease calculator
- Enter the car's price with GST, choose electric or petrol, and pick the lease term and interest rate from your quote.
- Enter your salary, and open the costs section for running costs, registration and stamp duty.
- Read what your take-home pay falls by, the split between pre-tax and post-tax deductions, and the comparison with a car loan.
Worked example
A $60,000 electric car over 3 years at 8%, with $3,300 of running costs and $900 registration, on a $100,000 salary. The lessor claims $5,454.55 of GST, so $54,545.45 is financed with a 46.88% residual of $25,570.91: the lease is $1,078.43 a month. The package is $16,841.16 a year, all before tax, saving $5,389.44 of tax and Medicare levy, so take-home pay falls by $11,451.72 a year, $6,983.56 less than paying a car loan and running costs from after-tax pay. A $50,000 petrol car on the same terms has $10,000 a year paid after tax under the ECM, and take-home pay falls by $13,803.31.
The rules for 2026-27
- Electric cars under $91,661: no FBT (from 1 July 2022; plug-in hybrids excluded from 1 April 2025)
- Other cars: taxable value 20% of the price a year, paid after tax to avoid FBT (ECM)
- GST credit on the car up to $6,353 (car limit $69,883)
- ATO minimum residuals: 65.63%, 56.25%, 46.88%, 37.50%, 28.13% for 1 to 5 years
Sources: Australian Taxation Office (car limit, luxury car tax thresholds, FBT on electric cars, statutory formula, TD 93/142 residual values), 2026-27 tax rates. Everything runs in your browser.
Frequently asked questions
How does a novated lease save tax?
Your employer pays the lease and running costs from your salary before tax, so you pay less income tax and Medicare levy, and the GST on the car and running costs is claimed back. For an electric car that's exempt from FBT, the whole package comes out before tax. For other cars, part is paid after tax (the employee contribution method) so no fringe benefits tax is charged.
Which electric cars are FBT-exempt?
Battery electric and hydrogen fuel cell cars first held and used from 1 July 2022 whose value at first sale is under the luxury car tax threshold for fuel-efficient vehicles, $91,661 in 2026-27. Plug-in hybrids lost the exemption from 1 April 2025, except for leases already in place. Budget 2026 proposes limiting the full exemption to cars up to $75,000 from 1 April 2027, subject to legislation.
What is the ECM and how much is paid after tax?
For cars that aren't exempt, the FBT taxable value is 20% of the car's price (including GST) each year. Paying that much from your after-tax pay, the employee contribution method, brings the taxable value, and so the FBT, to nil. On a $50,000 car that's $10,000 a year, of which $9,090.91 goes towards the lease after GST.
What is the residual or balloon payment?
The amount left to pay at the end of the lease. The ATO sets minimums of 65.63% of the amount financed for 1 year, 56.25% for 2, 46.88% for 3, 37.50% for 4 and 28.13% for 5 years. You pay it plus GST to keep the car, or refinance it into a new lease.
How much GST do I save?
The lessor claims the GST on the car's price up to one-eleventh of the car limit, $6,353 in 2026-27 (on a $69,883 car), so less is financed. Your employer also claims the GST on running costs like charging, fuel, servicing and tyres. Registration has no GST.
Does an exempt EV lease affect anything else?
Yes. An exempt electric car is still a reportable fringe benefit: about 20% of the price × 1.8868 a year appears on your income statement. It isn't taxed, but it counts for the Medicare levy surcharge, some government payments, child support and HELP repayment income.
