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How much can I save with a novated lease?
NovatedLeaseCalc Editorial · Updated April 2026 · Based on ATO 2025–26 published rates
Exact figures for every salary bracket, based on ATO 2025–26 tax rates. All examples use a 3-year lease, 15,000km/yr, NSW, standard employer.
The tables below are calculated using ATO 2025–26 individual income tax rates, the statutory FBT formula, and ATO minimum residual values. Each example includes a realistic running cost package: comprehensive insurance ($1,800/yr), registration ($850/yr), servicing ($600/yr), tyres ($400/yr), and fuel or charging costs. The figures represent the total annual financial benefit — what you genuinely keep compared to buying the same car with after-tax money.
Two types of saving are captured. The first is the income tax saving — because every dollar of salary sacrifice reduces your taxable income, you pay less tax on the remaining income. The second is the GST saving — your employer claims the GST credit on the vehicle purchase, reducing the effective cost to you by 1/11th of the car price. The GST saving is a one-off benefit in year one only; the income tax saving recurs every year of the lease.
EV novated lease — $62,000 car (e.g. Tesla Model 3 / BYD Sealion 7)
FBT fully exempt. No post-tax ECM required. Largest savings available.
Notice that the annual tax saving is the same at $60,000 and $80,000 — both salaries sit in the 32.5% marginal bracket, so the rate applied to the sacrifice is identical. The jump in savings at $120,000 occurs because those earners cross the 37% bracket, meaning each sacrificed dollar saves more tax. The savings plateau again between $80,000 and $100,000 for the same reason — same marginal rate, same saving per dollar.
Budget EV — $45,000 car (e.g. BYD Atto 3 / MG ZS EV)
Still FBT exempt. Lower upfront cost, lower savings but excellent value.
The $45,000 EV delivers meaningfully lower savings than the $62,000 car — the annual sacrifice is smaller, so the tax saving is proportionally smaller. However, the lower fortnightly cost makes it accessible to employees on lower salaries, or those who want to minimise their lease commitment while still accessing the FBT exemption. If your priority is keeping out-of-pocket costs low rather than maximising the total benefit, the budget EV is often the better choice.
Petrol / hybrid — $62,000 car
FBT applies. ECM post-tax contribution reduces savings vs EV.
For petrol and hybrid vehicles, the Fringe Benefits Tax applies at 20% of the vehicle's base value per year — on a $62,000 car, that is $12,400 in FBT value. To bring this to zero, employees must make Employee Contribution Method (ECM) post-tax contributions, which directly reduce the income tax saving. This is why the annual benefit for a petrol car is roughly half that of an equivalent EV at the same price point. PHEVs, as of 1 April 2025, are treated identically to petrol vehicles and receive no FBT exemption.
Key insights from the data
Year one is significantly better than subsequent years
The GST saving — 1/11th of the vehicle purchase price — applies only in year one. On a $62,000 car, that is $5,636 you receive once, upfront. In years two and three, only the income tax saving continues. This means the total three-year benefit on an EV at $95,000 salary might be $12,176 (year 1) + $6,540 + $6,540 = $25,256 across the lease — but spread evenly, it calculates to roughly $8,419 per year. Year one is always the strongest year financially.
Higher salary does not always mean proportionally higher savings
The tax saving depends on your marginal rate at the point where the salary sacrifice occurs — not on your total salary. If you earn $80,000 and sacrifice $20,000, the sacrifice pushes your income from $80,000 down to $60,000. The entire $20,000 sacrifice falls in the 32.5% bracket, so you save 32.5 cents per dollar. The same mechanics apply at $90,000 and $100,000 for the same lease — the savings are identical until enough sacrifice pushes income across a bracket boundary.
The fortnightly cost is the number that matters most
The "annual benefit" figures can be misleading because they describe the saving relative to buying the same car with after-tax money — but they do not tell you what you actually pay out of pocket. The fortnightly cost column shows the real impact on your take-home pay. At $95,000 salary leasing a $62,000 EV, your take-home drops by approximately $638 per fortnight. That is what the lease costs you in disposable income — a figure you can directly compare with your budget and with what a car loan would cost.
What these numbers do not include
All figures assume a standard employer (not a charity or hospital, which have larger FBT exemption caps). They do not include provider administration fees, which typically range from $300 to $1,200 per year and directly reduce the net saving. The numbers also exclude the balloon payment at the end of the lease — the ATO minimum residual (46.88% of the car's value for a 3-year lease), which you must pay, refinance, or trade in. Account for provider fees and the residual when comparing a novated lease against other financing options.