Novated Lease Calculator Australia: EV FBT Exemption

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Formula at a glance

Novated Lease Calculator: Cost to you — lease + running costs (ex GST) − income tax saved. Example: $55,000 EV on $110,000 salary → Cost to your take-home pay a year: $10,410 — How the Novated Lease Calculator works: Cost to you — lease + running costs (ex GST) − income tax saved

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📘 About the Novated Lease Calculator Australia

A novated lease is a three-way agreement between you, your employer and a finance company: lease payments and running costs come out of your pay. Battery electric cars under the luxury car tax threshold are exempt from fringe benefits tax, so everything can be paid before tax — a big saving.

Petrol and hybrid cars usually use the employee contribution method, paying part after tax to remove FBT. GST is saved on the car and running costs. At the end you pay the residual (balloon), set by ATO minimums.

🧮 Formula

Cost to you

lease + running costs (ex GST) − income tax saved

✏️ Worked examples

$55,000 EV on $110,000 salary

You enter
Car price (drive-away)	55,000 $
Your salary	110,000 $
Lease term	3 years
Finance rate	7.5%
Running costs a year (charging/fuel, insurance, tyres, rego)	4,000 $
Battery electric car (FBT-exempt)?	Yes

You get
Cost to your take-home pay a year	$10,410
Per fortnight	$400
Income tax saved	$4,899 a year
Pre-tax deductions	$15,309
Post-tax contribution (to remove FBT)	$0
Residual (balloon) at end	$25,784 incl. GST
Same costs paid from after-tax pay	$16,839 a year

$400 a fortnight.

$45,000 petrol car on $90,000

You enter
Car price (drive-away)	45,000 $
Your salary	90,000 $
Lease term	3 years
Finance rate	7.5%
Running costs a year (charging/fuel, insurance, tyres, rego)	4,000 $
Battery electric car (FBT-exempt)?	No

You get
Cost to your take-home pay a year	$11,847
Per fortnight	$456
Income tax saved	$1,340 a year
Pre-tax deductions	$4,186
Post-tax contribution (to remove FBT)	$9,000
Residual (balloon) at end	$21,096 incl. GST
Same costs paid from after-tax pay	$14,505 a year

$456 a fortnight.

🧭 How to use this calculator

What you enter

Car price (drive-away) ($)
Your salary ($)
Lease term
Finance rate (%)
Running costs a year (charging/fuel, insurance, tyres, rego) ($)
Battery electric car (FBT-exempt)?

What you get

Cost to your take-home pay a year
Per fortnight
Income tax saved
Pre-tax deductions
Post-tax contribution (to remove FBT)
Residual (balloon) at end
Same costs paid from after-tax pay

❓ Frequently asked questions

Are novated leases worth it for electric cars?

Usually yes: with the FBT exemption the whole cost comes from pre-tax pay, saving roughly your marginal tax rate plus GST.

Are plug-in hybrids still FBT-exempt?

No — the exemption for plug-in hybrids ended on 1 April 2025, except for existing arrangements.

What happens at the end of a novated lease?

You pay the residual, refinance it, or trade the car in.

Does an exempt EV benefit affect anything else?

Yes — it is a reportable fringe benefit, so it counts for HELP repayments, Medicare levy surcharge and some government payments.

🚙 Novated Lease Calculator Australia (EV FBT Exemption)