Calculate your novated lease savings. Enter your salary, car price, and running costs to see how salary packaging reduces your tax and what your take-home pay looks like. Updated for 2026-27 tax brackets.
| Without novated lease | With novated lease | |
|---|---|---|
| Fortnightly take-home | $2,587.71 | $2,112.68 |
| Fortnightly car cost | $698.57(from after-tax pay) | $0.00(already deducted pre-tax) |
| Net fortnightly after car costs | $1,889.14 | $2,112.68 |
By salary packaging your car, you could save $5,812 per year in tax. Over a 3-year lease, that is $17,436 in total estimated savings.
| Component | Monthly | Annual |
|---|---|---|
| Finance (lease payment) | $846.90 | $10,163 |
| Running costs (fuel, insurance, rego, servicing) | $666.67 | $8,000 |
| Total package | $1,513.57 | $18,163 |
Higher earners save more because a larger share of the lease payment is offset against a higher marginal tax rate. Move the salary slider to see how your tax bracket affects the saving.
A shorter lease means higher monthly payments but a lower residual value at the end. A longer lease reduces payments but leaves a higher residual. The tax saving changes too because the annual package amount differs.
Running costs (fuel, insurance, rego, servicing) are part of the pre-tax package. Including more running costs increases the salary sacrifice amount and the tax saving, but also reduces your fortnightly take-home pay.
A more expensive car means a larger salary sacrifice package and a bigger tax saving in dollar terms, but it also means a larger residual value due at the end of the lease.
Your employer must agree to salary packaging the lease. Most large employers, government agencies, and not-for-profit organisations offer this as a standard benefit.
Finance providers typically require permanent or long-term contract employment. Casual employees and contractors may not be eligible for novated leasing.
New cars and used cars under 5 years old are generally eligible. Most providers cap the vehicle age at 8 years at the end of the lease term. Electric vehicles may attract additional tax benefits.
Like any finance product, the lease provider will assess your credit history and ability to service the payments. A stronger credit profile may mean a more competitive interest rate.
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Subject to lender approval, terms and conditions apply.
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A novated lease is a three-way agreement between you, your employer, and a finance company. Your employer deducts lease payments from your pre-tax salary, reducing your taxable income. The lease covers both the car finance and running costs (fuel, insurance, registration, servicing) in a single salary package.
Savings depend on your income tax bracket. Higher earners save more because a larger portion of the lease payment is offset against a higher marginal tax rate. A $45,000 car on a $100,000 salary typically saves $3,000 to $5,000 per year in tax.
Yes, your employer must agree to salary packaging the lease. Most large employers, government agencies, and not-for-profit organisations offer novated leasing. Some smaller private employers choose not to offer it.
The lease can transfer to your new employer if they agree to salary packaging. If they do not, the lease converts to a personal arrangement where you make payments from your after-tax income. You can also pay out the remaining balance.
Yes, FBT applies to the personal use component of a novated lease. The Employee Contribution Method (ECM) is the most common way to reduce or eliminate FBT by making post-tax contributions. This calculator shows the pre-tax salary saving only and does not model FBT or ECM contributions.
Yes, but most novated lease providers prefer vehicles under 5 years old at the start of the lease and under 8 years old at the end. Older vehicles may attract higher rates or shorter lease terms.
The residual value is the amount you owe at the end of the lease term. The ATO sets minimum residual percentages based on the lease term (e.g. 46.88% for a 3-year lease). You can pay the residual, refinance, trade in, or start a new lease.
A novated lease package typically includes fuel, insurance, registration, servicing, tyres, and roadside assistance. All of these costs are bundled into the pre-tax salary deduction, increasing your tax saving compared to paying them separately from after-tax income.
Results are estimates only and should not be relied upon for financial decisions. Actual novated lease repayments will depend on the lender, your credit profile, and the specific terms offered. Interest rates used are for illustration purposes only and may not reflect current market rates.
Subject to lender approval, terms and conditions apply.
This calculator is general information only and is not financial advice.