The marketing around novated leasing tends to lead with the biggest possible number. “Save up to $25,000!” reads the banner. “Pay less than a petrol car!” promises the headline. All technically true — but for a specific person, driving a specific car, on a specific salary. For everyone else, the real savings are somewhere in between, and the details matter.
This is a plain-English breakdown of what the numbers actually look like across different salary bands, what drives the saving, and how a novated car lease calculator can help you model your own situation before you commit to anything.
The short version: if you earn above $60,000, your employer offers salary packaging, and you’re in the market for a new EV priced under $91,387, the financial case is strong. But it’s not identical for everyone — and understanding why is the difference between a great decision and an expensive surprise.
The Three Sources of Saving
Before the numbers, it helps to understand where the money actually comes from. EV novated leases generate savings through three distinct mechanisms, and most people only think about one of them.
1. Income tax reduction. Your employer deducts lease payments and running costs from your gross salary before tax is calculated. Every dollar packaged reduces your taxable income, saving you tax at your marginal rate. At the 32.5% bracket (plus 2% Medicare levy), every dollar sacrificed saves 34.5 cents. At the 37% bracket, it’s 39 cents. At 45%, it’s 47 cents. The higher your income, the greater the saving from this mechanism alone.
2. Zero FBT on eligible EVs. With a standard petrol or diesel novated lease, FBT applies to the value of the car benefit — typically calculated at 20% of the vehicle’s base value, multiplied by the 47% FBT rate. On a $65,000 vehicle, that’s around $6,110 per year that ordinarily has to be offset through post-tax contributions, eroding the income tax saving significantly. For eligible battery electric vehicles under the $91,387 luxury car tax threshold, this FBT liability is zero. That’s the policy change that made EV novated leasing genuinely transformative.
3. GST savings. When a vehicle is financed through a novated lease, the leasing company claims the GST on the purchase price and passes that saving on to you. On a $60,000 EV, that’s approximately $5,455 off the effective vehicle cost — a one-time benefit that’s easy to overlook in the monthly payment figures.
Running costs — charging, registration, insurance, tyres, servicing — are also packaged pre-tax, adding a further tax saving on every dollar of car expenses throughout the lease term.
What the Numbers Look Like at Different Salaries
The saving scales with income, because the marginal tax rate determines how much each pre-tax dollar is worth. Here’s how the figures stack up for a $55,000 EV on a three-year novated lease at different salary levels, using 2025–26 tax rates:
$70,000–$90,000 salary: At the 32.5% marginal rate, the income tax saving on lease and running cost payments is meaningful, and the zero-FBT benefit adds significantly on top. Total savings over the three-year term typically land in the range of $9,000–$13,000 compared to buying the same car with a standard car loan — roughly $3,000–$4,300 per year. That’s a real and material benefit, even if it’s short of the headline figures.
$90,000–$135,000 salary: As income crosses into the 37% bracket, the saving on each packaged dollar increases. For a $55,000 EV on a three-year term, the combined income tax saving plus GST benefit typically lands around $12,000–$15,000 over the lease. Add in the lower running costs of an EV versus petrol and the effective saving over the period pushes higher.
$135,000+ salary: At the top marginal rate of 45%, the income tax benefit on every packaged dollar is maximised. Savings on a three-year novated lease of a well-priced EV can reach $15,000–$25,000 compared to an equivalent car loan arrangement, depending on the vehicle and packaging structure.
One caveat worth flagging: employees with student debt, those near the Medicare Levy Surcharge threshold, or those receiving Family Tax Benefit need to factor in the Reportable Fringe Benefit Amount. Even when FBT payable is zero, the notional value of the EV benefit is reported on your income statement and can affect income-tested thresholds. For some employees this can partially offset the headline saving — which is precisely why running your specific numbers through a proper calculator, and consulting a tax professional, matters before you sign anything.
The Running Cost Equation
The tax saving story is only half the picture. The other half is what an EV costs to run compared to a petrol equivalent — and here the gap is substantial.
According to the Electric Vehicle Council, an EV covering 12,000 kilometres a year spends around $500 in charging costs compared to approximately $2,500 for a comparable petrol car. Maxxia estimates the saving at around $1,400 annually for a driver covering 15,000 kilometres. And because EVs have no engine, transmission, head gasket, filters, or spark plugs, servicing intervals are less frequent and costs are lower.
Over a three-year novated lease, the running cost differential can easily add $3,000–$4,000 to the total saving figure — money that, because running costs are packaged pre-tax, is also generating its own income tax saving as it goes.
The Vehicles That Make the Most Sense
Not all EVs produce the same saving. The formula rewards vehicles with a lower purchase price (smaller notional FBT base, even though it’s zero-rated for eligible EVs), strong fleet discounts through the leasing provider’s dealer network, and low servicing costs.
The most popular EVs on novated leases in Australia in 2026 include the Tesla Model 3, Tesla Model Y, BYD Atto 3, BYD Seal, BYD Dolphin, Hyundai Ioniq 5, Hyundai Ioniq 6, Kia EV6, and MG4. All sit comfortably under the $91,387 LCT threshold. The BYD Dolphin Essential’s launch at under $30,000 has brought the entry point for FBT-exempt novated leasing lower than ever — useful context given that the EV market has expanded from around two models under $40,000 in 2022 to roughly ten today.
For a $58,000 EV on a three-year lease at a $98,000 salary, one calculator puts the saving at approximately $89 per week compared to a car loan — or $13,884 over the lease term. Those figures shift depending on the interest rate assumed, the running cost package, and your employer’s administration fees, which is exactly why the calculator step is not optional.
How to Actually Use a Novated Car Lease Calculator
A generic calculator will give you a ballpark. A good one will let you input your exact gross salary, the specific vehicle’s drive-away price, your lease term (typically two to five years), your estimated annual kilometres, and the running costs you plan to package. The output should show you the fortnightly salary sacrifice amount, your estimated income tax saving, the GST benefit, and ideally a direct comparison against a car loan on the same vehicle.
The most important thing to look for is transparency about what’s included. Some calculators quote a “total saving” that bakes in optimistic assumptions about fuel savings or residual values. What you want to see clearly separated is: income tax saving, FBT saving (zero for eligible EVs), GST saving, and running cost tax saving. Each is real — but they’re different in nature and some of them are one-time while others recur annually.
Once you have a calculator estimate, the next step is a formal quote from two or three novated lease providers. Providers like Maxxia, SG Fleet, and Autopia all operate national dealer networks and can often negotiate fleet-level pricing off the retail drive-away price — a saving that feeds directly into the total package. Admin fees, interest rates, and included running cost budgets vary between providers, and the difference can shift your weekly cost meaningfully.
The Bottom Line
The headline savings figures in EV novated lease marketing are not fictional — they’re just accurate for a specific scenario that may or may not match yours. The honest picture is still compelling. For most salaried Australian employees earning above $70,000 whose employer offers salary packaging, a novated lease on an eligible BEV delivers a genuine, material saving compared to any other way of financing the same car. The combination of zero FBT, pre-tax salary packaging, a GST benefit, and lower running costs stacks up in a way that no car loan or cash purchase can match.
Run your own numbers. Get a formal quote. And read the fine print on the residual value before you sign — because how you handle end-of-lease options matters almost as much as the savings going in.
This article is for informational purposes only and does not constitute financial or tax advice. Individual savings vary based on salary, vehicle choice, lease term, employer arrangements, and applicable tax rates. Consult a qualified tax professional before entering any novated lease arrangement.