PHEV Novated Lease Calculator
Model the true cost of salary packaging a plug-in hybrid (PHEV) under current Australian policy. Accounts for the loss of the FBT exemption from 1 April 2025, the LCT fuel-efficient threshold, dual-fuel (electric + petrol) running costs, lease hidden fees, and opportunity cost against paying cash.
PHEV Novated Lease Calculator
Model the true cost of salary packaging a plug-in hybrid (PHEV) under current Australian policy β including the standard FBT cost (PHEVs lost the FBT exemption from 1 Apr 2025), LCT threshold check, dual-fuel running cost estimator, lease hidden costs, and opportunity-cost comparison against using your own cash.
Policy & Compliance
PHEV β BEVSmart PHEV Running Cost Estimator
DUAL-FUELLease Terms & Hidden Costs
Alternative: Use Your Own Cash / Housing Equity
How to Use This PHEV Novated Lease Calculator
You are thinking about salary packaging a plug-in hybrid and your employer just sent you a novated lease quote with a bunch of numbers you are not sure about. This calculator works through the actual dollar cost of that lease compared with buying the car outright, so you can decide before you sign anything.
Step 1: Pick your vehicle type
The first dropdown sets whether you are looking at a PHEV or a BEV. This matters because PHEVs pay Fringe Benefits Tax from 1 April 2025 β the exemption that zero-emission vehicles get does not apply to plug-in hybrids. A RAV4 Prime at $65,000 will have roughly $3,500 to $5,000 more in FBT than a Model 3 at the same price. The calculator applies the correct FBT rate automatically once you pick the type.
Step 2: Enter your vehicle details
Select a preset vehicle or choose Custom Vehicle and fill in the driveaway price, stamp duty, and rego for your state. For a $65,000 PHEV driveaway, stamp duty in NSW is roughly $2,500 and rego runs about $700 a year. The tool uses these numbers to calculate the residual value and your monthly lease payments.
Step 3: Set the lease term
Most PHEV novated leases run for 3, 4, or 5 years. The calculator pre-fills the ATO minimum residual for your term β about 56% for 3 years, 45% for 4 years, or 28% for 5 years. A higher residual means lower monthly payments but a bigger lump sum at the end.
Step 4: Configure the running cost estimator
PHEVs run on both electricity and petrol, and the split matters. If your PHEV has a 60km electric range and you charge 5 times a week, you cover roughly 15,600km a year on electricity. The remaining distance runs on petrol. Enter your electricity rates (home and public), petrol price, and the home-versus-public charging ratio. The tool calculates separate energy costs for each fuel and adds them to your insurance, servicing, and tyre costs.
Step 5: Check your result
The result panel shows two numbers side by side: the annual novated lease cost and the annual cost of buying outright. The graph below plots cumulative spending month by month so you can see exactly when the novated lease becomes cheaper β or more expensive β than paying cash. For most PHEV buyers on a salary above $80,000, the novated lease still comes out ahead, but the margin is slimmer than it used to be before the FBT change.
How the PHEV Novated Lease Calculation Works
The PHEV FBT rule changed on 1 April 2025
Before 1 April 2025, a PHEV novated lease was treated the same as a BEV lease β zero Fringe Benefits Tax if the vehicle was under the LCT cost cap. The government closed that loop-hole. Now every new PHEV novated lease pays the standard FBT rate of 37.7% on the taxable value of the benefit. For a $65,000 vehicle on a 4-year lease, that adds roughly $4,500 to $6,000 in FBT over the lease term. This is the single biggest factor separating PHEV and BEV novated leasing.
The dual-fuel running cost split
PHEVs have two fuel sources with different cost profiles. A RAV4 Prime with 60km of electric range charged 5 times per week covers about 15,600km on electricity annually. At 17kWh per 100km, that is 2,652kWh of electricity. At a weighted average of $0.30 per kWh (80% home at $0.25, 20% public at $0.50), the electric portion costs roughly $796 per year. The remaining 4,400km on petrol at 5.0L per 100km and $1.80 per litre costs about $396 per year. Total running cost comes to roughly $1,192 before insurance and servicing.
LCT threshold rules for PHEVs
Luxury Car Tax applies at 33% on the amount above the threshold. PHEVs with a combined fuel consumption of 3.5L per 100km or less qualify for the higher fuel-efficient threshold of $91,387 (2024-25). PHEVs that use more fuel fall back to the $80,567 other-vehicles threshold. LCT is added to your effective vehicle cost before calculating the lease β this changes your monthly payment even though it does not affect the FBT treatment.
Worked example: RAV4 Prime novated vs cash
Assume a $65,000 driveaway PHEV, 4-year lease at 6.5%, $35,000 residual, $90,000 salary (32.5% marginal rate), and $2,000 per year in running costs. Monthly lease payments come to roughly $790. The pre-tax deduction (lease + running costs + admin fees) totals about $12,000 per year, saving $3,900 in income tax. FBT on that amount costs $4,524. Net tax benefit: negative $624 per year. Buying with cash from your offset account costs about $11,500 per year in foregone interest. The novated lease still wins by roughly $800 per year after factoring in the GST recovery on running costs, but the margin is tight β a 0.5% higher interest rate or higher running costs could flip the result.
How the opportunity-cost comparison works
The calculator also shows what happens if you buy the car with your own cash. If that cash would otherwise sit in a mortgage offset account earning 5.5% interest, spending it on a car costs you 5.5% per year in foregone savings. Over 3 years on a $65,000 car, that is roughly $10,725 in lost interest. The novated lease avoids this opportunity cost because you never part with the cash upfront β the finance company fronts the money and you pay it back pre-tax.
Why GST recovery changes the maths
When your employer novated leases a vehicle, they can claim back the GST on the purchase price and on running costs. That is an extra 1/11th off the effective cost. On a $65,000 car, the GST component is about $5,909. On $2,000 of running costs, it is another $182. This cash flows directly back to your employer and typically reduces your lease payments by the equivalent amount. The calculator accounts for this in the novated cost column but not in the cash purchase column β which is one reason the novated option often comes out ahead even with PHEV FBT.
Frequently Asked Questions
Do PHEVs still qualify for FBT exemption in Australia?
No. From 1 April 2025, the Australian government removed the FBT exemption for plug-in hybrid electric vehicles. Only zero-emission vehicles β battery electric and hydrogen fuel cell β qualify for the exemption now. If you signed a novated lease for a PHEV before 1 April 2025, your existing lease is grandfathered and continues under the old rules for its full term. But no new FBT-exempt PHEV leases can be entered into after that date.
How much extra does FBT add to my PHEV lease over 4 years?
It depends on your salary, but for a $65,000 PHEV on a 4-year lease with a $90,000 salary, the FBT cost works out to roughly $4,500 to $6,000 over the full term. That is calculated at 37.7% of the annual pre-tax deduction (lease payments plus running costs), which is the statutory FBT rate of 20% multiplied by the Type 1 gross-up factor of 1.8868. The higher your salary, the bigger the pre-tax deduction, and the more FBT you pay.
What is the LCT threshold for PHEVs in 2025-26?
The fuel-efficient vehicle LCT threshold is $91,387 for the 2024-25 and 2025-26 financial years, rising to $91,661 in 2026-27. To qualify, your PHEV must have a combined fuel consumption of 3.5L per 100km or less as rated under the Road Vehicle Standards Act 2018. If it exceeds that figure, the lower $80,567 other-vehicles threshold applies instead. LCT is 33% on the amount above whichever threshold your vehicle falls under.
Why is the PHEV running cost estimator split into two fuels?
PHEVs operate on both electricity and petrol, and the cost per kilometre is very different for each. Electricity typically costs $0.03 to $0.05 per km while petrol costs $0.09 to $0.15 per km depending on your rates. The calculator splits your annual driving into electric and petrol portions based on your vehicle range and charging frequency, then applies the correct cost to each. A single-fuel estimate would either over- or under-estimate your actual running costs by hundreds of dollars per year.
Should I pick a PHEV or BEV for my novated lease?
For most people on a salary above $80,000, a BEV is significantly more tax-effective because it qualifies for 0% FBT while a PHEV pays 37.7%. On a $65,000 vehicle, the FBT difference alone is $4,000 to $6,000 over a 4-year lease. PHEVs still make sense if you regularly drive long distances without charging access, or if your employer has a fleet policy that favours PHEVs. Run both calculators with your specific numbers before deciding.
What is a residual value and do I have to pay it?
The residual value β also called a guaranteed future value β is the lump sum you owe at the end of the lease if you want to keep the car. It is set as a percentage of the vehicle price, determined by the ATO based on lease length. For a 4-year lease it is typically around 45% of the effective price. You can pay it in cash, refinance it into a new loan, or trade the car in and walk away. You are not locked into paying it.
How does buying with cash from my offset account compare?
If you have $65,000 in a mortgage offset account earning 5.5% interest, spending it on a car costs you roughly $3,575 per year in foregone interest savings. Over 3 years that is about $10,725. A novated lease avoids this because you never touch the cash β the finance company fronts the money and you pay it back from pre-tax income. The calculator shows this comparison side by side so you can see the true economic cost of each option.
Does a PHEV novated lease affect my HECS repayments?
Yes. The pre-tax deduction is reported as a Reportable Fringe Benefit Amount on your payment summary. This can push your repayable HECS balance higher because the repayment threshold calculations use your adjusted taxable income, which includes RFBA. If you are close to a repayment threshold, the novated lease could tip you into the next bracket β adding several hundred dollars to your annual HECS repayment. Factor this into your overall assessment.
Can I claim GST back on a PHEV novated lease?
Your employer claims back the GST on both the vehicle purchase and on running costs like electricity, petrol, and servicing. This effectively reduces the cost by 1/11th. On a $65,000 car that is about $5,909 back to your employer, which typically reduces your lease payments by the equivalent monthly amount. This GST recovery applies equally to PHEVs and BEVs β the difference is that BEVs get the additional FBT exemption that PHEVs no longer receive.
What happens if my PHEV lease started before 1 April 2025?
Your existing lease is grandfathered under the old rules. That means the FBT exemption continues for the full term of your current lease β you do not lose it mid-term. However, when your lease expires and you renew or take out a new novated lease, the new PHEV FBT rules will apply. If you are within 12 months of lease expiry, it is worth comparing a BEV renewal against continuing with a PHEV, because the BEV will qualify for the FBT exemption that your current PHEV is grandfathered under.