See your exact salary sacrifice, tax saving, FBT breakdown, and true total cost — step by step, in plain English. The most transparent novated lease calculator in Australia.
Your situation
Salary and location determines your tax saving
Gross annual salary
Before tax, excluding super
$
State
For stamp duty calculation
Lease term
1–5 years
Your vehicle
Price and usage determine FBT and residual
Vehicle price (drive-away)
Including GST, excluding rego and CTP
$
Annual kilometres
Affects ATO statutory residual
km
Vehicle type
Battery EVs under $91,387 are FBT-exempt — a major advantage
Novated lease interest rate
Provider rate — typically 6–8%. Adjust to your quoted rate.
6.50%
%
Running costs
Packaged into salary sacrifice — adjust to your vehicle
Fuel / charging per year
$
Insurance per year
$
Registration per year
$
Servicing per year
$
Tyres per year
$
Provider fee per year
Management fee charged by provider
$
Annual tax saving
—
— per month
Monthly payment (pre-tax)
—
— post-tax contribution
Residual at end of lease
—
— of vehicle price
True total cost
—
— year term
Take-home pay impact
How your fortnightly pay packet changes with salary sacrifice
Without novated lease
Gross salary—
Income tax—
Medicare levy—
Take-home (fortnightly)—
→
With novated lease
Gross salary—
Pre-tax deduction—
Income tax—
Medicare levy—
Post-tax contribution—
Take-home (fortnightly)—
—
net fortnightly change after deductions and contributions
How this works: Your employer deducts the pre-tax lease payment from your gross salary before calculating income tax. This reduces your taxable income, so you pay less tax. The post-tax contribution (if any) covers your FBT obligation. The net effect is that you effectively pay for the car partly with money that would otherwise have gone to the ATO.
Fringe Benefits Tax (FBT) — step by step
Most providers hide this calculation. Here it is, transparently.
FBT Exempt — Electric Vehicle
Your vehicle qualifies for the EV FBT exemption. Battery EVs (and eligible PHEVs) under the fuel-efficient LCT threshold ($91,387 in FY2025–26) are completely exempt from Fringe Benefits Tax when provided through a novated lease. This means no post-tax employee contribution is required — your entire lease package is pre-tax. This is one of the most significant tax advantages in Australian personal finance.
1
Car value (base value for FBT)
The FBT base value is the original cost of the vehicle including GST and dealer delivery, but excluding registration and CTP. This is the value from which all FBT is calculated.
—
2
Statutory fraction applied
— × 20%
The ATO applies a flat 20% statutory fraction to the car value. This has been 20% since 2014 (previously it was a sliding scale based on km). It represents the "deemed" private use of the vehicle.
—
3
Taxable value (gross-up Type 1)
— × 2.0802
The taxable value is grossed up to account for GST. Type 1 (2.0802) applies where the employer can claim GST input tax credits — standard for commercial vehicle leases. This inflates the FBT base to the pre-GST equivalent.
—
4
FBT payable (47% rate)
— × 47%
FBT is levied at 47% — matching the top marginal income tax rate. This is your employer's liability, but in a novated lease it is passed back to you as an employee contribution to reduce the taxable value to zero.
—
5
Your post-tax contribution (ECM)
To reduce FBT to zero, you make an Employee Contribution Method (ECM) payment from post-tax income equal to the statutory amount from Step 2. This eliminates the FBT liability entirely. You pay this from your after-tax pay — it shows up as the post-tax deduction on your payslip.
—
ECM (Employee Contribution Method) — Under ECM, instead of paying FBT calculated on the statutory formula, you make a post-tax contribution equal to the car's private-use value. For most standard novated leases the two methods produce similar costs. ECM can be advantageous if your actual business use is low and the statutory method would produce a higher FBT obligation. In practice, most providers default to the statutory method.
1
Operating costs (annualised)
Total running costs packaged into the lease — fuel, insurance, rego, servicing, tyres, provider fee.
—
2
ECM post-tax contribution
Equal to the operating costs — you contribute this from post-tax pay, eliminating the FBT liability.
—
3
FBT payable under ECM
When you make a post-tax contribution equal to operating costs, the taxable value of the benefit is reduced to zero. FBT owed = $0.
$0
Your annual FBT obligation
—
True total cost — novated vs alternatives
Simplified comparison over the lease term · No deposits · 3-year loan term · For deposit/term-adjusted comparison, use the full calculator →
True total cost = all finance payments + stamp duty + running costs − vehicle exit value.
Novated running costs are paid pre-tax (tax saving applied). Cash includes 5% p.a. opportunity cost.
Comparison assumptions:
All alternatives use the same 3-year term · No deposit (deposit-adjusted comparisons available in the full calculator) ·
Running costs exclude the novated provider fee (loan/cash/dealer don't have this charge) ·
Personal loan at 8.99% · Dealer finance at 6.99% with 25% balloon.
Residual value and ATO statutory minimums
What you owe at the end of the lease — and your options
Your residual
—
— of vehicle price (ATO minimum for your km)
Estimated market value at end
—
— vs residual
ATO statutory residuals by annual km — your lease term
Annual km
Residual %
Residual amount
Monthly payment effect
At end of lease you can: Pay the residual and own the car outright · Refinance the residual into a new lease on the same or different car · Trade in — if market value exceeds the residual, you pocket the difference.
Next step
Your numbers show novated lease saves you significantly
Based on your inputs, a novated lease is the most cost-effective option for your situation. A novated lease provider can give you an exact quote — including specific rates from their panel of funders — that may improve on these estimates.
Veercal may earn a referral fee when users connect with finance providers. This never affects our calculator's outputs — your numbers are always independent.
Estimates only. All figures are indicative and based on the inputs you provided. FBT rates (47%), gross-up rate (2.0802), and ATO statutory residuals verified for FY2025–26. Tax calculations use ATO Stage 3 brackets effective 1 July 2024. Novated lease outcomes depend on your employer's specific arrangements, provider rates, and individual circumstances. This is general information only — not financial advice. Always consult a licensed financial adviser before making financial decisions. Full disclaimer →