EV Novated Lease Calculator
Compare the true cost of salary packaging an electric vehicle via novated lease versus buying out-of-pocket. Uses Australian FBT exemption rules to calculate your real take-home pay difference.
EV Novated Lease Calculator
Compare salary packaging an EV vs buying out-of-pocket under Australia's FBT exemption rules β with LCT threshold check, smart running cost estimator, lease hidden costs, and opportunity-cost comparison against using your own cash or housing equity.
Policy & Compliance
Smart Running Cost Estimator
DATA-DRIVENLease Terms & Hidden Costs
Alternative: Use Your Own Cash / Housing Equity
Is a novated EV lease actually cheaper? Here's the real maths
Your employer offers salary packaging. You've heard EVs get an FBT exemption. But the lease provider's sales pitch says you'll save "up to 30%" and you don't know whether that's real or marketing. This calculator shows you the actual numbers β pre-tax deductions, tax saved, LCT if your vehicle breaches the threshold, hidden admin fees, running costs, and the opportunity cost if you'd otherwise use your own cash or housing equity. Enter your salary, vehicle price, and driving habits β the results show side-by-side: novated lease vs out-of-pocket vs cash purchase (with offset interest cost).
The calculator applies current Australian tax rates and ATO-published LCT thresholds across FY 2022-23 to FY 2026-27. It automatically detects whether your vehicle breaches the LCT threshold β and if it does, removes the FBT exemption and shows the FBT cost in the results. Toggle the Alternative Cash / Housing Equity comparison to see whether the novated lease tax advantage genuinely beats leaving your money in the offset account.
Who uses this calculator
A salaried worker on $120,000 is looking at a $65,000 BEV. The novated lease provider says they'll save $8,000 over three years. But does that account for the $350 setup fee, the $8/month admin fee, and the opportunity cost of not keeping $65,000 in their mortgage offset? This calculator shows the true net cost of each option β novated lease, out-of-pocket, and cash with offset β so you can make a decision based on real numbers, not a sales pitch.
HR managers modelling whether to offer novated EV leases across different salary levels need to understand the FBT implications. The marginal tax rate engine (0%β45% brackets) and dynamic FBT detection let you model scenarios from junior staff at $60,000 to executives at $200,000+ β and quantify the FBT exposure at each level.
Tax agents advising clients on EV acquisition can show the impact of LCT thresholds, the interplay between novated lease deductions and reportable fringe benefits, and how the cash/offset comparison changes at different mortgage rates. The calculator provides the numbers; you provide the advice.
How the EV novated lease calculation works
LCT and FBT: the two taxes that make or break the deal
Luxury Car Tax (LCT) is 33% on the amount above the fuel-efficient threshold for the chosen financial year. Unlike FBT, LCT is not exempt for EVs β it's added to the vehicle cost before calculating the lease. The threshold changes each year: $84,916 (2022-23), $89,332 (2023-24), $91,387 (2024-25 and 2025-26), $91,661 (2026-27). If your $65,000 BEV sits under the threshold, you pay $0 LCT. If you buy a $95,000 BEV in FY 2024-25, LCT is ($95,000 β $91,387) Γ 33% = $1,192 β and you lose the FBT exemption entirely.
FBT exemption logic: If the vehicle price (drive-away, before LCT) is under the LCT threshold, the novated lease pre-tax deduction is fully FBT-exempt (0% FBT). If the price exceeds the threshold, the exemption is lost and standard FBT applies at ~37.7% of the taxable value (20% statutory rate Γ 1.8868 Type 1 gross-up). This is a binary outcome β there's no partial exemption.
Worked example: $65,000 BEV on $120,000 salary, 3-year term
Vehicle price $65,000, under the $91,387 LCT threshold β $0 LCT, full FBT exemption. Residual at 30% = $19,500. Loan amount = $65,000 β $19,500 = $45,500. At 6% finance rate, annual interest = $2,730. Annual lease repayment = $45,500 Γ· 3 + $2,730 = $17,930. Add $96/yr admin fee and $3,000/yr running costs β annual pre-tax deduction β $21,026. At the 32.5% marginal tax rate ($120,000 salary), tax saved β $6,833/yr. Net cost over 3 years β $63,078 β $20,500 tax saved + $19,500 residual = ~$62,078.
Out-of-pocket comparison: Buying the same car outright costs $65,000 + $9,000 running costs = $74,000. The novated lease saves approximately $11,922 β or about 16% β over three years. But if you'd used that $65,000 to offset a 5.5% mortgage, you'd save $10,725 in interest over three years. The true novated saving vs the cash+offset scenario is smaller β and that's what this calculator reveals.
Marginal tax rates used
β€$18,200 β 0%, $18,201β$45,000 β 19%, $45,001β$120,000 β 32.5%, $120,001β$180,000 β 37%, >$180,000 β 45% (excluding Medicare levy). This is a simplified estimate β actual savings depend on your employer's novated lease arrangements, Reportable Fringe Benefits Amount (RFBA) impact, and GST treatment.
Running costs and hidden fees
Energy cost: annual km Γ efficiency (kWh/100km) Γ· 100 = total kWh. Split by home vs public charging ratio, multiplied by respective rates. Typical EVs: 15β22 kWh/100km. Home electricity: $0.25β$0.35/kWh. Public fast charging: $0.50β$0.70/kWh. Hidden fees: A $8/month admin fee adds $288 over a 3-year term. A $350 setup fee is pre-tax deductible, so its net cost is reduced by your marginal tax rate. These line items are commonly missed in provider quotes but materially reduce your saving.
Residual value: ATO minimums range from ~65.63% (1-year lease) to ~28.13% (5-year lease). The residual is paid at end-of-term to own the vehicle, re-financed, or traded in. The calculator includes the residual in the net novated cost.
Frequently Asked Questions
Which vehicles qualify for the FBT exemption?
Battery electric vehicles (BEVs) and hydrogen fuel cell vehicles (FCEVs) with a drive-away price below the LCT threshold qualify. PHEVs only qualified for new leases entered before 1 April 2025 β from that date, only zero-emission vehicles qualify. The LCT threshold for fuel-efficient vehicles is $91,387 in FY 2024-25 and $91,661 in FY 2026-27. See the ATO's electric cars exemption page for full eligibility criteria.
What is the LCT threshold and how does it affect my lease?
Luxury Car Tax is 33% on the amount above the fuel-efficient threshold. Unlike FBT, LCT is not waived for EVs β it's added to your vehicle cost before calculating the lease. The threshold changes each financial year ($89,332 in 2023-24, $91,387 in 2024-25, $91,661 in 2026-27). If your vehicle price exceeds the threshold, you pay LCT on the excess AND lose the FBT exemption.
How does the LCT threshold affect my FBT exemption?
The LCT threshold is the hard eligibility ceiling β there is no partial exemption. Under the threshold: full FBT exemption (0% FBT on the pre-tax deduction). Over the threshold: FBT exemption lost entirely, standard FBT applies at ~37.7% of the taxable value. A $65,000 BEV sits under the threshold and gets full exemption. A $95,000 BEV breaches it and loses the exemption completely.
How much do hidden lease fees cost over a term?
A $8/month admin fee adds $288 over a 3-year term. A $350 setup fee is usually charged once but is pre-tax deductible, so its net cost is reduced by your marginal rate β at 32.5%, the setup fee costs $236 after tax. These line items are easy to miss in provider quotes but can reduce your saving by 3-5%. Always confirm the full fee schedule before signing.
How is the running cost estimator calculated?
Energy use = annual km Γ efficiency (kWh/100km) Γ· 100. The total kWh is split by your home vs public charging ratio, then multiplied by the per-kWh rate. Add insurance, rego, tyres, and servicing. Typical EVs: 15-22 kWh/100km. Home electricity: $0.25-$0.35/kWh. Public fast charging: $0.50-$0.70/kWh. If your provider quotes GST-inclusive figures, divide by 1.1 before entering them.
Should I use my own cash or housing equity instead?
It depends on the opportunity cost. If your cash sits in a 5.5% offset account, spending $65,000 on a car costs ~$10,725 in lost interest over 3 years. A novated lease typically saves 3-7% (your marginal tax rate), but admin fees, setup fees, and LCT can narrow or reverse the gap. Use the Alternative Cash comparison to see the true net cost in your scenario.
Does the FBT exemption affect reportable fringe benefits?
Yes. Even though eligible EVs are FBT-exempt, the pre-tax amount is still recorded as a Reportable Fringe Benefit Amount (RFBA) on your payment summary. This can affect HECS/HELP repayments, childcare subsidy, Medicare levy surcharge, and certain Centrelink payments. Factor this into your personal assessment.
What is a residual value?
The residual (guaranteed future value) is the agreed vehicle value at end of lease, set as a percentage of the effective price. ATO minimums: ~65.63% (1-year) to ~28.13% (5-year). You can pay it to own the vehicle, re-finance, or trade in. The calculator includes the residual in the net novated cost.
What happens if my salary changes during the lease?
This calculator uses a static salary for the marginal tax rate. Salary changes (promotions, bonuses) shift your bracket and alter the tax saving each year. Recalculate at each change point for a more accurate multi-year model. The single-salary approach provides a conservative baseline.