Free calculator · FBT exemption 2025–26
EV Novated Lease vs Buy Calculator
Compare buying an EV outright with a personal loan vs salary packaging through a novated lease. The FBT exemption makes eligible EVs significantly cheaper through novated leasing.
Registration, insurance, charging & servicing per year
YOUR RESULTS
MONTHLY SAVING
$1,486
novated vs loan
TOTAL SAVING
$59,119
over 3 yr incl. GST
GST SAVING
$5,636
one-time
COST COMPARISON (MONTHLY)
Novated lease
Personal loan
Residual is typically refinanced into a new novated lease or paid from pre-tax salary at term end.
These are estimates only — not financial, tax or investment advice. Consult a licensed adviser before making decisions.
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See my full plan →How the EV novated lease tax benefit works
A novated lease allows your employer to lease a car on your behalf and deduct the repayments from your gross salary before income tax. That reduces your taxable income — and since your employer buys the vehicle through a business arrangement, you also avoid the GST (1/11th of the purchase price).
The Electric Car Discount Act 2022 adds an extra layer: eligible BEVs are completely exempt from Fringe Benefits Tax. Normally, employer-provided car benefits attract FBT at 47% — but for EVs under the luxury car threshold, there is no FBT at all. This makes the pre-tax packaging work exactly as advertised, with no offsetting tax liability.
A fully-maintained novated lease also bundles registration, insurance, servicing, and charging into the pre-tax package — expenses you would otherwise pay from after-tax dollars. At a 32% marginal rate, every $1,000 of running costs in the package saves $320 in tax.
Frequently asked questions
What is a novated lease?
A novated lease is a three-way agreement between you, your employer, and a finance company. Your employer leases the vehicle on your behalf and deducts the repayments — and often running costs — from your pre-tax salary. This reduces your taxable income, so you pay less income tax.
Why is an EV especially good for a novated lease?
Under the Electric Car Discount Act 2022, eligible battery electric vehicles (BEVs) and plug-in hybrids (PHEVs, until April 2025) are exempt from Fringe Benefits Tax when salary packaged. Without FBT applying, 100% of the lease package (vehicle repayments and running costs) comes from pre-tax dollars — significantly bigger savings than a petrol or diesel vehicle.
Which EVs are FBT-exempt?
BEVs priced below the luxury car tax threshold for fuel-efficient vehicles ($89,332 for 2025–26) are fully FBT-exempt. PHEVs were also included until 1 April 2025, after which only BEVs remain exempt. The exemption does not apply to vehicles above the threshold.
What is the residual (balloon payment)?
At the end of the lease term, a residual amount — typically 43–65% of the ex-GST vehicle price, depending on term — remains owing. This is commonly refinanced into a new novated lease, paid from your salary, or used to purchase the vehicle outright. The residual is paid from pre-tax salary if your employer continues the arrangement.
Does the running cost really come out pre-tax?
Yes — a fully-maintained novated lease bundles registration, insurance, servicing, and fuel or charging into the pre-tax deduction. This is another tax benefit not available on a personal loan. The calculator includes annual running costs in the pre-tax package.
What GST saving is there?
Your employer purchases the vehicle through a business arrangement and claims the GST input tax credit. That saving — 1/11th of the drive-away price — is passed on to you as a lower cost base for the lease. On a $65,000 EV, the one-time GST saving is approximately $5,909.
Does my employer have to offer novated leasing?
Not all employers offer it. Ask your HR or payroll team whether you have access to salary packaging. Most large employers, government agencies, and not-for-profits offer novated leasing. If your employer doesn't, you cannot access this benefit.
What happens if I change jobs during the lease?
If you leave your employer, the lease generally transfers to the new employer (if they also offer salary packaging) or you take over the payments from post-tax salary. It is important to review your lease agreement's portability terms before signing.
Does novated leasing affect my super or entitlements?
Your reportable fringe benefits amount (RFBA) increases. This can affect income-tested thresholds for Medicare Levy Surcharge, child support, or some Centrelink entitlements. However, for the EV FBT exemption, the reportable amount is nil — meaning none of these impacts apply.
How does this compare to the Stage 3 tax cuts?
The 2025–26 Stage 3 cuts lowered the second bracket to 16% (dropping further to 15% in 2026–27, 14% in 2027–28). Even at 16%, salary packaging a $65k EV still generates significant savings compared to a personal loan, because the entire package — repayments and running costs — is pre-tax, and you save GST upfront.