CheckTax· Australian Tax & Money CalculatorsSource-verified
Calculator · FY 2026-27 · FBT 47% / 1.8868 gross-up

Australian Novated Lease Calculator

Statutory-formula FBT, Employee Contribution Method, electric-car exemption check, and the actual change to your take-home pay. We model the case most novated providers default to. ECM zeroes out FBT, plus the EV exemption path.

Show advanced options

Calculations run in your browser. Nothing is sent.

How it works

The statutory formula
FBT taxable value = car base value × 20% × (days available / 365). After 4 full years of ownership/lease the base value is reduced by 1/3. The 20% rate has been the only statutory rate since the 2011 reforms that scrapped the kilometre-tiered scale.
The 47% rate, grossed up by 1.8868
Once you have the taxable value, you multiply by 1.8868 (type-2 gross-up, no GST entitlement) to get the "grossed-up taxable value", then multiply by 47% to get the FBT liability. Effective rate on the original taxable value: 47% × 1.8868 ≈ 88.7%. That's why FBT is brutal, and why ECM (which zeroes the taxable value via a post-tax contribution) is the standard solution.
Employee Contribution Method (ECM)
You make a post-tax contribution to the lease equal to the statutory taxable value (20% × car price). That contribution reduces the FBT taxable value to zero, and your employer doesn't pay FBT. The trade-off is you pay 20% of the car price from after-tax dollars instead of having FBT taxed at the 47% gross-up rate.
EV exemption
For a BEV first held and used on/after 1 July 2022, at a GST-inclusive price ≤ $91,387 (the 2025-26 fuel-efficient LCT threshold), FBT is zero, no statutory value, no ECM needed. The entire lease and running cost is paid pre-tax. This is why electric novated leases save so much more than ICE.
RFBA: the catch nobody mentions
Even when FBT is exempt for an EV, the grossed-up taxable value is still added to your "income for surcharge purposes", meaning it can push you into the Medicare Levy Surcharge, increase your HECS/HELP repayment rate, and reduce family payments. It's not in your taxable income, but it's in those income tests.

Frequently asked

Is a novated lease always worth it?
For an EV under $91,387, almost always, the tax savings are large. For an ICE car, it depends on your salary bracket and the running costs. The biggest factor: how much of the cost ends up pre-tax. The calculator computes the actual difference in take-home pay vs paying for the car post-tax.
What about the residual value?
At lease end you can pay out the residual (typically 28-46% of the car price by ATO guidelines) to own the car, or trade it back and start a new lease. The residual isn't modelled in the annual cashflow. Your lease repayment quote factors it in as a balloon at term end. This calculator focuses on the in-term tax impact.
Does the operating-cost (logbook) method save more?
It can, if your private use is below ~30%, but it requires a valid 12-week logbook every 5 years. For most novated leases (private use 80%+), the statutory method gives a lower taxable value. The ATO's default and the providers' default is the statutory method. This calculator uses statutory only.
What if I salary sacrifice into super at the same time?
You can do both. The novated lease pre-tax deduction and super salary sacrifice both reduce your taxable income, but the lease deduction doesn't count toward the concessional cap ($30,000 for 2025-26). They're additive.
What if my car price exceeds $91,387?
The EV exemption is lost. The car is treated as ICE for FBT purposes (statutory formula, ECM available). You'd still novate it, but the savings drop significantly. There's no partial exemption, it's pass/fail at the LCT threshold.
Is the EV FBT exemption changing?
Announced, three-phase wind-back. Until 31 March 2027 the full exemption stays for BEVs at or below the LCT fuel-efficient threshold ($91,387). From 1 April 2027 to 31 March 2029, EVs priced at $75,000 or below keep the full exemption. EVs above $75,000 up to the LCT threshold get a 25% FBT discount instead. From 1 April 2029 onward the full exemption ends entirely and sub-LCT EVs get only the 25% discount. Existing novated leases are grandfathered for the life of the original agreement; refinancing, extending or materially altering a lease will likely be treated as a new arrangement and lose protected status. Announced in the 2026-27 Federal Budget (12 May 2026), the legislation has not yet passed both houses, so this calculator continues to apply the current full exemption until Royal Assent.

Related calculators