Novated lease benefits
EV novated leases are exempt from FBT
GST saving on vehicle purchase price (up to $6,334)
Pay for car and running costs with pre-tax salary
A novated lease company does all the set up for you
What is an EV novated lease?
A novated lease on an EV is a way to finance your car through a three-way agreement between you as an employee, your employer and a novated lease provider.
It allows you to finance a vehicle entirely for personal use as part of your salary — known as salary packaging. This helps you save on income tax.
That's in addition to the up-front GST discount you'll get on the vehicle purchase and all your packaged running costs through your novated lease. On a $60,000 EV, the up-front GST saving alone would be $5,454.
An EV novated lease works in the same way but you enjoy some extra advantages.
EV novated lease fringe benefits tax (FBT) exemption
Currently, novated leases on EVs and PHEVs valued below $91,387 (the Luxury Car Tax threshold for FY 2024/25) are exempt from fringe benefits tax, thanks to an Australian Government incentive.
This means you can pay for 100% of your car costs (the car itself, plus all running costs) using pre-tax salary deductions.
This is an even better deal than what you can get with a standard novated lease. It reduces the cost of paying for an electric vehicle by thousands of dollars per year. It's cheaper than paying for the car with cash.
In the three-way agreement each party has the following roles to play
The employer agrees to make regular, automated payroll deductions from the employee’s salary to the leasing company.
The employee agrees to have those salary deductions in exchange for the use of the vehicle. The vehicle can be used for business purposes, or entirely for personal use.
And novated leasing companies...
Procure the vehicle, establish the lease and manage the administrative, contractual and compliance aspects of the transaction.
Top 10 EV novated lease benefits
No GST payable on the car
No GST payable on running costs
GST can be claimed by the employer as a tax credit
Reduce payroll tax for employers
No obligation on the part of the employer to either the vehicle or the lease
A cost-effective way of acquiring a vehicle
Employee income tax savings
Fully maintained personal vehicle — including electricity, insurance, servicing, repairs, roadside assist and registration
100% personal use of the vehicle
Option to de-novate and re-novate if changing employers
How much could you save on an EV with a novated lease?
Tesla Model Y (RWD)
- Regular driveaway price: $68,314
- Upfront novated lease GST saving: -$6,109
- Total weekly cost: $220
- Runnings costs included in weekly cost (with GST saving): $11.70 (electricity), $9.53 (servicing & tyres), $30.77 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $39,198
Tesla Model 3 (RWD)
- Regular driveaway price: $64,814
- Upfront novated lease GST saving: -$5,791
- Total weekly cost: $212
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $8.77 (servicing & tyres), $28.85 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $37,552
BYD Atto 3 (Extended Range)
- Regular driveaway price: $52,113
- Upfront novated lease GST saving: -$4,637
- Total weekly cost: $180
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $9.24 (servicing & tyres), $30.77 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $32,133
MG4 (Essence)
- Regular driveaway price: $49,709
- Upfront novated lease GST saving: -$4,419
- Total weekly cost: $172
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $8.77 (servicing & tyres), $28.85 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $30,794
Volvo XC40 (Recharge Pure Electric)
- Regular driveaway price: $85,189
- Upfront novated lease GST saving: -$6,191
- Total weekly cost: $268
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $11.15 (servicing & tyres), $32.69 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $47,588
Cupra Born (5-Seat Hatch)
- Regular driveaway price: $64,490
- Upfront novated lease GST saving: -$5,762
- Total weekly cost: $214
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $13.85 (servicing & tyres), $30.77 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $37,890
Kia EV6 (GT-Line AWD)
- Regular driveaway price: $93,995
- Upfront novated lease GST saving: -$6,191
- Total weekly cost: $292
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $11.15 (servicing & tyres), $32.69 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $51,646
MG ZS EV (Essence)
- Regular driveaway price: $49,709
- Upfront novated lease GST saving: -$4,419
- Total weekly cost: $174
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $11.08 (servicing & tyres), $28.85 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $31,114
Kia Niro (EV GT-Line)
- Regular driveaway price: $75,395
- Upfront novated lease GST saving: -$6,191
- Total weekly cost: $241
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $10.85 (servicing & tyres), $30.77 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $42,580
Polestar 2 (Standard Range)
- Regular driveaway price: $70,951
- Upfront novated lease GST saving: -$6,191
- Total weekly cost: $228
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $10.69 (servicing & tyres), $30.77 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $40,539
BMW iX1 (XDrive30 M Sport)
- Regular driveaway price: $91,930
- Upfront novated lease GST saving: -$6,191
- Total weekly cost: $294
- Runnings costs included in weekly cost (with GST saving): $11.79 (electricity), $23 (servicing & tyres), $32.69 (comprehensive insurance), $16.92 (registration & CTP)
- Total tax saving during lease: $52,257
Vehicle pricing and novated lease estimates correct as at October 2023 and assume a driver in NSW, driving 15,000km per year, with an annual salary of $120,000.
Tip: To get the best novated lease deal, make sure you choose a leasing company that passes on their bulk-buying car discounts. This means you will also get a discount off the regular car price and can save more money on your vehicle purchase.
How to choose a novated car lease
Electricity for charging
Registration
Insurance
Servicing costs
Replacement tyres
Vehicle repairs
These costs will be estimated based on the number of kilometres you intend to drive each year. If your circumstances change, these estimates can be updated throughout the term of your lease. Speak to your employer to determine the type of novated lease they offer.
Tip: You will also pay no GST on running costs for your vehicle under a novated lease.
Most popular EVs being novated in 2023
- BYD Atto 3
- MG ZS EV
- Volvo XC40 Recharge
- Hyundai Ioniq 5
- Mitsubishi Outlander PHEV
- Mitsubishi Eclipse Cross PHEV
- MG HS+ EV
Top 5 accessories novated lease owners get
Yes, you can add accessories to your EV with a novated lease. These can be bundled in to the purchase price of the new car with a GST discount.
- Floor Mats
- Window Tints
- Roof Racks
- Tow Bar
- Side Steps
