Novated Lease Calculator Australia
Most novated lease quotes show you a weekly number and a "tax saving" figure. Neither tells you whether the deal is actually cheaper than a standard car loan for your income, your car, and your tax situation. This calculator does that work.
Who it's for
- PAYG employees whose employer offers novated leasing, who want to know if salary packaging a car beats a standard car loan.
- Anyone who's received a novated lease quote and wants to stress-test the assumptions independently.
- Employees considering an EV who want to model the zero-FBT benefit against standard car finance.
What it calculates
- Pre-tax salary deduction and its impact on taxable income.
- Post-tax contribution for FBT offset (zero for eligible EVs).
- GST saving on vehicle and running costs.
- FBT liability — or $0 for eligible BEVs under $91,387.
- Comparison with a standard secured car loan, after tax.
Why it matters
The difference between a well-structured novated lease and a poorly explained one is often thousands of dollars — and the difference between a novated lease and a standard car loan depends entirely on your income, car choice, and tax situation. This calculator makes that comparison concrete and visible before you commit.
Novated Lease Calculator
Your salary and tax
Your total salary before tax and super. Don't include super contributions.
Based on 2025-26 tax rates. Does not account for offsets or other individual adjustments.
The vehicle
On-road price including GST, stamp duty, registration, and CTP.
ATO minimum for 3yr is 46.88%. Can be set higher.
Employer and finance
Most employers contribute 0%.
Typically 6%–10% for new vehicles.
Best new car loan from 5.66% p.a. (May 2026).
Results
Novated Lease Breakdown
Annual pre-tax salary deduction
$10,906
Reduces your taxable income
Annual post-tax contribution (FBT offset)
$10,755
Estimated annual income tax saving
$3,762
Estimated GST saving
$1,667
FBT liability
$10,755
Residual value at end of lease
$25,784
Estimated total annual cost (all deductions)
$16,231
Your real annual cost — what the car and running costs effectively cost you after tax and GST benefits.
Car Loan Comparison
Car loan — estimated annual repayment
$20,376
Running costs not included — add $0 for like-for-like.
Car loan + running costs (after tax, annual)
$20,376
Annual saving (novated lease)
$4,145/year
A novated lease saves approximately $4,145/year in this scenario.
Over the full 3-year term: $12,434
Summary Comparison
| Element | Novated Lease | Standard Car Loan |
|---|---|---|
| Annual pre-tax deduction | $10,906 | — |
| Annual post-tax contribution | $10,755 | — |
| Annual tax saving | $3,762 | $0 |
| Annual GST saving | $1,667 | $0 |
| FBT liability | $10,755 | N/A |
| Total annual cost | $16,231 | $20,376 |
| Residual at end of term | $25,784 | $0 |
| Running costs included | Yes | Separately |
A novated lease looks competitive for your situation
The next step is checking whether your employer's novated lease provider is offering a competitive lease rate — or whether you have room to negotiate.
→ Run a standard car loan calculation to compare directlyHow this novated lease calculator works
This calculator models the financial mechanics of an Australian novated lease arrangement and compares the result with a standard secured car loan for the same vehicle.
Lease cost calculation: The calculator uses your vehicle price and lease term to determine the regular lease payment using a standard amortisation formula, applying the lease interest rate you've entered. The residual at the end is pre-populated from ATO minimum guidelines for the selected term and can be adjusted.
Pre-tax deduction: The pre-tax deduction is calculated as the annual lease cost plus the included running costs, minus any employer contribution. This amount is treated as salary foregone — it reduces your taxable income and produces a tax saving equal to the deduction multiplied by your marginal tax rate (plus Medicare levy).
FBT calculation: For non-EV vehicles, the calculator applies the ATO statutory formula method to estimate FBT liability. For eligible BEVs under $91,387 (2025-26 LCT threshold): FBT = $0.
GST saving: The calculator estimates GST savings as approximately 1/11 of the vehicle price (amortised over the lease term) plus 1/11 of annual running costs.
Car loan comparison: The car loan comparison uses a standard principal-and-interest amortisation formula, with the full vehicle drive-away price as the loan amount, over the same number of years as the lease term, at the comparison loan rate you've entered.
ATO minimum residual values
| Lease Term | ATO Minimum Residual |
|---|---|
| 1 year | 65.63% of original cost |
| 2 years | 56.25% of original cost |
| 3 years | 46.88% of original cost |
| 4 years | 37.5% of original cost |
| 5 years | 28.13% of original cost |
How to interpret your results
- Pre-tax deduction: This is the salary you're effectively trading for the car and running costs. Make sure you can comfortably afford the reduction in net pay, not just the net outcome on paper.
- Post-tax contribution (non-EVs): This is the additional amount coming from your after-tax pay to offset the FBT liability. For eligible EVs, this is zero.
- Annual tax saving: This is real money, but it's proportional to your income. A marginal rate of 32.5% means 32.5 cents saved per dollar of pre-tax deduction. Higher-income earners benefit most.
- Total annual cost: This is the most important single number. Compare this directly to the car loan + running costs figure.
- Residual obligation: This is what you must pay or finance at the end of the lease. It is not optional.
- Car loan comparison: If the novated lease wins by a narrow margin — say, less than $1,000/year — factor in the administrative complexity, the employer dependency risk, and the residual obligation before deciding.
Calculator assumptions
This calculator is a general guide only. Results are based on:
- 2025-26 individual income tax rates and a 2% Medicare levy
- ATO statutory formula method for FBT calculation (Type 1 benefits, 47% FBT rate)
- 2025-26 Luxury Car Tax threshold of $91,387 for the EV FBT exemption
- ATO minimum residual values for selected lease terms
- GST calculated as 1/11 of vehicle price and running costs (amortised)
- Standard principal-and-interest amortisation for the car loan comparison
This calculator does not account for: the operating cost FBT method, individual tax offsets or levies beyond the standard Medicare levy, lender-specific novated lease fees and management charges, employer-specific arrangements, business-use percentage adjustments, or changes in tax policy after May 2026.
Results are not a quote, personalised financial advice, or tax advice. Always seek independent financial and tax advice before entering into a novated lease arrangement.