AU FBT Novated Lease ROI Calculator
A novated lease lets you salary-sacrifice a car payment, reducing tax. Pre-tax dollars cover the lease + running costs. The Electric Car FBT exemption (since July 2022) makes EV novated leases especially attractive. Calculate your tax savings.
How Novated Leases Work
A novated lease is a 3-way agreement between you, your employer, and a finance company. Your employer deducts the lease payment from your pre-tax salary, reducing your taxable income. The car is for personal use but registered to you. At lease end, you can buy out the residual, refinance, or upgrade.
EV FBT Exemption
Since July 2022, electric vehicles (battery-electric, plug-in hybrid until April 2025, hydrogen fuel cell) are FBT-exempt if under the Luxury Car Tax threshold (A$89,332 in 2026 for fuel-efficient cars). This makes EV novated leases dramatically more cost-effective — typically saving A$15,000-A$30,000 over a 4-year lease.
FBT Calculation Methods
Two methods: Statutory Method (20% of car cost × FBT rate, simpler) and Operating Cost Method (actual % business use × car cost × FBT rate). Most personal leases use the statutory method. ATO published FBT rate 47% in 2026, with gross-up factor 1.8868 for non-reportable benefits.
Source: ATO Fringe Benefits Tax Assessment Act, Treasury Laws (Electric Car Discount) Act 2022, ATO FBT Reckoner 2026. Last updated: May 2026.