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The calculator shows the mechanics. A provider quote adds the exact interest rate, fees and running-cost budget for your car and employer. Get two or three quotes and compare them line by line against the figures above before you sign.
See how a novated lease worksWhat the calculator does
A novated lease lets your employer pay for a car and its running costs out of your salary before tax. This calculator shows what that does to your take-home pay and whether you come out ahead of simply buying the car, using the tax settings that apply from 1 July 2026:
- Income tax at the 2026-27 resident rates (0%, 15%, 30%, 37%, 45%) plus the 2% Medicare levy, on your salary with and without the lease deduction.
- GST. Your employer claims the GST on the car (up to the $69,883 car limit, a maximum credit of $6,353) and on running costs, and passes the saving through.
- FBT. On a lease starting before 1 April 2027, battery electric cars first held after 1 July 2022 and priced at or below $91,661 are exempt. From 1 April 2027 the exemption continues only for electric cars valued up to $75,000; dearer eligible EVs use a 15% statutory rate, and from 1 April 2029 every eligible EV does (2026-27 Budget measure). Other cars attract FBT on 20% of the car's value under the statutory formula, which most people cancel with a post-tax employee contribution (the ECM) rather than paying FBT at 47% on a grossed-up amount.
- The residual. ATO minimum residual values apply: 1 year 65.63%, 2 years 56.25%, 3 years 46.88%, 4 years 37.50%, 5 years 28.13%. The calculator shows the payout including GST.
- The comparison. "If you bought it" finances the full GST-inclusive price at the same rate and term with the same residual share and pays running costs including GST from take-home pay. Change the rate to compare against a specific loan offer.
Reading the result
The headline figure is the annual saving against buying. The two take-home lines are what your fortnightly pay will look like, scaled to a year; the difference between them is the real cash cost of having the car through the lease. For petrol and diesel cars, the post-tax contribution line is money you pay from your bank account on top of the salary deduction.
Two things the calculator cannot know: your provider's fees (management fees of a few hundred dollars a year are normal, and are also packaged pre-tax) and whether your employer passes through the GST credit in full. Both belong in the quote comparison, which is why we suggest getting two or three quotes and reading whether a novated lease is worth it before signing.
Frequently asked questions
How does a novated lease calculator work out my savings?
It takes the lease payments and running costs out of your pre-tax salary, recalculates your income tax and Medicare levy on the lower amount using the 2026-27 resident rates, adds back any post-tax employee contribution, and compares the net cost with buying the same car on a loan at the same rate and paying everything from your take-home pay.
Is a novated lease worth it on a $70,000 salary?
Usually yes for an eligible electric vehicle, because the whole package comes out of pre-tax income at a 30% marginal rate plus Medicare levy with no FBT. For a petrol car the saving is smaller and mostly comes from the GST on the purchase price and running costs, because the Employee Contribution Method requires part of the cost to be paid post-tax to cancel the FBT.
What is the residual on a novated lease?
The lump sum owed at the end of the lease, set as a minimum percentage of the amount financed by the ATO: 65.63% after one year, 46.88% after three and 28.13% after five. GST is added when you pay it out to keep the car. You can also refinance it into a new lease or sell the car and pay the residual from the proceeds.
Does the calculator include the 1 April 2027 change to the EV FBT exemption?
Yes. Choose when the lease starts. Under the 2026-27 Budget measure, an electric car valued above $75,000 that is first provided from 1 April 2027 moves from a full exemption to a 15% statutory rate, and from 1 April 2029 that rate applies to every eligible electric car. A lease keeps the treatment that applied when it started. The measure was announced in the Budget; check that the legislation has passed before relying on it.
Does the calculator include FBT?
Yes. For a lease starting before 1 April 2027, an eligible electric vehicle (first held after 1 July 2022, priced at or below the $91,661 fuel-efficient luxury car tax threshold) is FBT exempt. For other cars it applies the statutory formula (20% of the car's value) and, by default, uses the Employee Contribution Method so you pay that amount post-tax and no FBT is charged; untick it to see the FBT passed on instead.
Why does the calculator show a reportable fringe benefit for an exempt EV?
Because the ATO still requires exempt electric car benefits to be reported. The amount is not taxed, but it is added to your income for HELP/HECS repayments, the Medicare levy surcharge, child support and some family payments, which can reduce the saving for some people.
Where the numbers come from. Tax brackets, Medicare levy, the car limit and the luxury car tax thresholds are the ATO's published 2026-27 figures; the FBT rate, gross-up factors and statutory percentage apply to the FBT year from 1 April 2026; residual minimums are from ATO ID 2002/1004, last checked 30 August 2026. The electric car changes from 1 April 2027 and 1 April 2029 are from 2026-27 Budget Paper No. 2, added 14 November 2026; they are announced policy and we have not confirmed the legislation has passed.