Australia Novated Lease Calculator

It depends on the vehicle. A fully electric car priced under the 2026-27 luxury car tax threshold ($91,661) is completely exempt from Fringe Benefits Tax when salary packaged, so the entire lease and running cost comes from pre-tax salary, saving you tax at your full marginal rate on that amount. A standard petrol, diesel, or hybrid car isn't FBT-exempt, so part of the cost has to come from post-tax pay (the employee contribution) to offset the FBT, which reduces but doesn't eliminate the tax benefit.

No. PHEVs lost their FBT exemption from 1 April 2025, regardless of price, unless there was a financially binding commitment to a specific PHEV before that date (which stays grandfathered for the life of that arrangement). For any new novated lease from 2026-27 onward, only battery electric vehicles (BEVs) and hydrogen fuel cell vehicles (FCEVs) qualify for the full exemption.

Yes. On 4 May 2026 the Treasurer announced a phased wind-back. The full exemption continues unchanged for any new lease entered before 31 March 2027. From 1 April 2027, EVs up to $75,000 stay fully exempt, but EVs priced between $75,001 and the luxury car tax threshold get only a 75% FBT discount instead of a full exemption. From 1 April 2029, no new lease is fully exempt, capping out at a 75% discount for eligible cars. Existing leases signed before 1 April 2027 keep their full exemption for the life of that lease.

ECM is how novated leases on non-exempt cars reduce or eliminate Fringe Benefits Tax. Part of the lease and running costs are paid from your post-tax salary (the 'employee contribution'), which offsets the taxable value of the car fringe benefit under the ATO's statutory formula method. Set the contribution correctly and FBT payable can be reduced to zero, though you're still paying that portion from after-tax pay rather than before-tax pay.

$91,661 for the 2026-27 financial year, for fuel-efficient vehicles. An EV priced at or below this drive-away price, leased before 31 March 2027, qualifies for the full FBT exemption. An EV priced above it doesn't get the exemption and is treated like a standard car for FBT purposes.

Potentially, yes. Salary sacrificing into a novated lease reduces your taxable income, but the pre-tax lease amount is typically added back as a reportable fringe benefit for HECS/HELP repayment income purposes, meaning your compulsory HECS/HELP repayment is calculated on a higher figure than your reduced taxable income alone. This calculator doesn't model that interaction; check the HECS/HELP Repayment Calculator separately if you have a HELP debt.