Australia only. Compares a novated lease, a car loan and a cash purchase of the same car over the same term. Defaults are examples, not a quote.
Novated lease costs least, $52,960. That is $38,586 less than the car loan and $33,181 less than the cash purchase.
Paid from salary before tax. Balloon at the end.
Price and stamp duty borrowed, repaid from take-home pay.
Price and stamp duty leave the account on day one.
| Line | Novated lease | Car loan | Cash purchase |
|---|---|---|---|
| Pay | |||
| Gross salary | $200,000 | $200,000 | $200,000 |
| Lease payments, fees and running costs, without GSTi | -$13,071 | - | - |
| Taxable income | $186,929 | $200,000 | $200,000 |
| Income tax by tier, 2026-27i | |||
| $0 to $18,200 | $0on $18,200 at 0% | $0on $18,200 at 0% | $0on $18,200 at 0% |
| $18,201 to $45,000 | $4,020on $26,800 at 15% | $4,020on $26,800 at 15% | $4,020on $26,800 at 15% |
| $45,001 to $135,000 | $27,000on $90,000 at 30% | $27,000on $90,000 at 30% | $27,000on $90,000 at 30% |
| $135,001 to $190,000 | $19,214on $51,929 at 37% | $20,350on $55,000 at 37% | $20,350on $55,000 at 37% |
| $190,001 and over | $0on $0 at 45% | $4,500on $10,000 at 45% | $4,500on $10,000 at 45% |
| Medicare levy, 2%i | $3,739 | $4,000 | $4,000 |
| Total income tax | $53,972 | $59,870 | $59,870 |
| What is left | |||
| Take-home pay | $132,957 | $140,130 | $140,130 |
| Loan repayments, after tax | - | -$12,854 | - |
| Running costs paid from take-home pay | - | -$4,165 | -$4,165 |
| Take-home pay left after the car, paid into the account per year | $132,957 | $123,111 | $135,965 |
| With no car, all take-home pay goes in | $140,130 | $140,130 | $140,130 |
| Over the whole term | |||
| Paid up front, price and stamp duty | - | - | $51,600 |
| Balloon paid at the end, with GSTi | $14,560 | - | - |
| Tax saved per year compared with the loan | $5,898 | - | - |
| Running costs over the term | $19,734 | $20,825 | $20,825 |
| Total paid for the car and running it, before tax savings | $79,917 | $85,093 | $72,425 |
| Income tax over the termi | $269,861 | $299,350 | $299,350 |
| Interest on the account | $96,025 | $92,105 | $84,841 |
| Tax on that interest | tax free | tax free | tax free |
| End of year | Novated lease | Car loan | Cash purchase |
|---|---|---|---|
| Start | $0 | $0 | -$51,600 |
| 1 | $136,674 | $126,554 | $84,984 |
| 2 | $281,779 | $260,914 | $229,993 |
| 3 | $435,833 | $403,560 | $383,946 |
| 4 | $597,851 | $554,550 | $547,101 |
| 5 | $760,808 | $707,662 | $713,066 |
| Balloon paid at the end of the lease | -$14,560 | - | - |
| Final balance | $746,248 | $707,662 | $713,066 |
Each fixed number in the calculation, where it comes from, and when it was checked. The same links sit behind the i icons. A row marked as an assumption has no source: change that input to your own number.
| What | Value used | Source |
|---|---|---|
| Income tax tiers 2026-27 | 0% to $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000, 45% above | ATO: tax rates for Australian residents Checked on 2026-10-20 |
| Medicare levy | 2% of taxable income. None up to $28,011, then 10 cents a dollar above it until it reaches 2%. Thresholds for 2025-26, the latest published | ATO: what is the Medicare levy ATO: Medicare levy reduction for low-income earners Checked on 2026-10-20 |
| Low income tax offset | $700 off the income tax, less 5 cents a dollar above $37,500 and 1.5 cents a dollar above $45,000. It can take the tax to $0 and no lower | ATO: low income tax offset Checked on 2026-10-20 |
| GST | 10% of the price without GST, so one eleventh of a price with GST | GSTR 2001/3, paragraph 21 Checked on 2026-10-20 |
| Car limit 2026-27 | $69,883. The GST credit on a car is capped at one eleventh of it, $6,353 | ATO: car thresholds from 1 July Checked on 2026-10-20 |
| Luxury car tax threshold for fuel-efficient cars 2026-27 | $91,661 | ATO: luxury car tax rate and thresholds Checked on 2026-10-20 |
| Minimum residual for a leased car | 65.63% for 1 year, 56.25% for 2 years, 46.88% for 3 years, 37.5% for 4 years, 28.13% for 5 years | ATO ID 2002/1004: car lease residual values Checked on 2026-10-20 |
| FBT statutory formula | Taxable value = base value x 20% x days available / days in the year - employee contribution. Base value = the price with GST and dealer delivery, without rego and stamp duty | ATO: taxable value of a car fringe benefit Checked on 2026-10-20 |
| FBT rate, gross-up rates, reporting threshold | FBT 47%. Gross-up 2.0802 with a GST credit, 1.8868 without. Reportable once the taxable value is over $2,000, grossed up at 1.8868 | ATO: FBT rates and thresholds Checked on 2026-10-20 |
| GST on the post-tax contribution | The contribution is the price of a taxable supply, so the employer pays one eleventh of it as GST | GSTR 2001/3, paragraphs 21 to 23 Checked on 2026-10-20 |
| Electric car FBT exemption | Battery electric or hydrogen car, first used on or after 1 July 2022, priced under the LCT threshold for fuel-efficient cars. Home charging is exempt too | ATO: electric cars exemption Checked on 2026-10-20 |
| Plug-in hybrids and FBT | No exemption from 1 April 2025. A plug-in hybrid used before then keeps it to the end of the fixed lease term | ATO: FBT on plug-in hybrid electric vehicles Checked on 2026-10-20 |
| Announced EV FBT changes, not yet law | Full exemption to 31 March 2027. From 1 April 2027 to 31 March 2029: full for a car costing $75,000 or less, a 15% statutory rate above. From 1 April 2029: a 15% rate for every electric car under the LCT threshold. Existing leases keep their rules | ATO: electric car discount changes Treasury media release, 5 May 2026 Checked on 2026-10-20 |
| Stamp duty NSW | Any car: $3 per $100 up to $45,000, then $5 per $100 above $45,000 | Revenue NSW: motor vehicle duty Checked on 2026-10-20 |
| Stamp duty VIC from 1 July 2026 | Green car (120 g/km CO2 or less, electric and most plug-in hybrids): $8.40 per $200 at any price. Other car, on the whole price: $8.40 per $200 up to $80,809, then $10.40 per $200 up to $100,000, then $14 per $200 up to $150,000, then $18 per $200 above | SRO Victoria: motor vehicle duty current rates Checked on 2026-10-20 |
| Stamp duty QLD | Electric or hybrid: $2 per $100 up to $100,000, $4 per $100 on the whole price above. 4 cylinders assumed: $3 per $100 up to $100,000, $5 per $100 on the whole price above | Queensland Government: vehicle registration duty rates Checked on 2026-10-20 |
| Stamp duty SA | Non-commercial car, at least $5: $1 per $100 up to $1,000, then $2 per $100 up to $2,000, then $3 per $100 up to $3,000, then $4 per $100 above | RevenueSA: stamp duty rates for vehicles Checked on 2026-10-20 |
| Stamp duty WA | Any car: 2.75% up to $25,000. $25,000 to $50,000: R% of the whole price, R = 2.75 + (price - $25,000) / 6666.66, rounded to 2 decimals. 6.5% above | WA Government: vehicle licence duty Checked on 2026-10-20 |
| Stamp duty TAS | Any car, at least $20: $3 per $100 up to $35,000, then $11 per $100 up to $40,000. Above that $4 per $100 on the whole price | SRO Tasmania: rates of duty Checked on 2026-10-20 |
| Stamp duty ACT, by CO2 emissions | Category AAA, zero emissions: $2.50 per $100 up to $45,000, then $4 per $100 up to $80,000, then $8 per $100 above. Category AA, 1 to 65 g/km, usual for a plug-in hybrid: $2.67 per $100 up to $45,000, then $4.41 per $100 up to $80,000, then $8 per $100 above. Category B, 131 to 175 g/km, usual for a small petrol car, to 31 January 2027: $3 per $100 up to $45,000, then $5.22 per $100 up to $80,000, then $8 per $100 above. Category B, 131 to 175 g/km, usual for a small petrol car, from 1 February 2027: $3.25 per $100 up to $45,000, then $5.59 per $100 up to $80,000, then $8 per $100 above | ACT Revenue Office: motor vehicle duty Checked on 2026-10-20 |
| Stamp duty NT | Electric or plug-in hybrid registered by 30 June 2027: 3% of the price above $50,000. Rego is also free, CTP is still paid. Other cars: 3% of the price | NT Government: EV registration and stamp duty concessions Checked on 2026-10-20 |
| Bonus and employee shares | A bonus is taxed as income in the year it is paid. Shares or rights from an employee share scheme are taxed as income at their market value at the taxing point, usually when they vest. The calculation pays both once a year, at the end of each year of the term | ATO: tax table for bonuses and similar payments ATO: tax-deferred employee share schemes Checked on 2026-10-20 |
| What the reportable fringe benefit changes | It is not taxed. It counts for the Medicare levy surcharge, HELP and other study loan repayments, Division 293 tax, family payments and child support | ATO: consequences of having a reportable fringe benefits amount Checked on 2026-10-20 |
| Base value after 4 years | The base value drops by a third in the FBT year that starts after the car has been held for 4 years. Not used in the calculation | ATO: FBT guide for employers, 7.8 the statutory formula method Checked on 2026-10-20 |
| Interest rates | Lease 7.5%, loan 9%, account 6% are examples. Use the rates on your own quote and account | Assumption, no source. Change the input to your own number. |
| Fuel and charging cost | Electric: 15,000 km at 17 kWh per 100 km and $0.30 per kWh, rounded to $765. Plug-in hybrid: 7,500 km at 17 kWh per 100 km and $0.30 per kWh plus 7,500 km at 6.5 L per 100 km and $2.00 per litre, rounded to $1,360. Petrol, diesel or regular hybrid: 15,000 km at 7 L per 100 km and $2.00 per litre, rounded to $2,100 | Assumption, no source. Change the input to your own number. |
| GST on fuel through the lease | Home charging is reimbursed with no GST credit. Petrol is bought on a fuel card, so its GST is claimed back. A plug-in hybrid claims GST only on the petrol share of its fuel cost | Assumption, no source. Change the input to your own number. |
| Mortgage serviceability buffer | A bank tests a new mortgage at its rate plus 3 percentage points | APRA keeps macroprudential policy settings steady APRA maintains current macroprudential policy settings Checked on 2026-10-20 |
| How a bank counts the car | A rough guide. The bank takes each monthly payment off the pay and lends what is left over 30 years. A novated lease is counted in one of two ways, depending on the bank: the payslip as it is, or the salary sacrifice added back to the income and the whole lease payment taken off. Running costs are left out for the loan and cash, because the bank already counts living costs. The deposit example uses a 20% deposit. Ask a broker how your bank works | Assumption, no source. Change the input to your own number. |
| Duty category by car type | ACT: electric AAA, plug-in hybrid AA, petrol B. QLD petrol: 4 cylinders. VIC: electric and plug-in hybrid count as green cars, petrol does not | Assumption, no source. Change the input to your own number. |
Not always. The lease saves income tax and GST but adds interest, fees and, on most cars that aren't electric, a post-tax contribution to cover fringe benefits tax (FBT). Enter your own numbers to see which option costs less.
An electric car first used from 1 July 2022 pays no fringe benefits tax (FBT) on a novated lease. The price must be under the luxury car tax threshold for fuel-efficient cars ($91,661 in 2026-27). The calculator applies the rules for your start date, including changes announced for leases from 1 April 2027.
A balloon is the lump sum left to pay at the end of a novated lease. The ATO sets the minimum by term, from 65.63% of the amount financed without GST for 1 year to 28.13% for 5 years. You pay it to keep the car, and the calculator adds it to the lease cost.
Yes. The lease lowers your take-home pay, and some banks count the whole lease payment as a debt. Each column shows how much less a bank may lend, so ask a broker how your bank counts it.
Each fixed number links to its official source, such as the ATO or a state revenue office. Click the i icon next to a number, or open "Sources for every number" on this page. A number with no source is marked as an assumption for you to change.