What Happens to a Novated Lease When You Leave Your Job?
When you leave your job, the novation can usually transfer to a new employer that supports salary packaging, or the lease can revert to you and its payments become an after-tax personal obligation. If neither option works, early termination or sale may be required. Ask the provider for a written payout and transfer quote before you resign; do not assume the tax saving continues automatically.
Can I take my novated lease to a new employer?
Often, yes, if the new employer offers salary packaging and agrees to the novation. The employer, financier and packaging provider need to process the transfer. The new employer’s policy, payroll timing, provider and eligibility rules can change the practical result, so obtain confirmation before relying on a transfer.
What if my new employer does not offer novated leasing?
The lease may revert to you as a personal finance lease, meaning payments are made from after-tax income and the salary-packaging tax benefit stops. You may also be able to refinance, sell the vehicle and settle the finance, or negotiate another arrangement with the financier. The exact options and costs are contract-specific.
What should I ask before leaving?
Request a written statement showing the outstanding balance, early termination costs, residual, transfer requirements, timing, insurance and running-cost treatment. Compare those figures with the value of the car and with the after-tax cost of keeping it personally. If you are being made redundant, ask how final pay, leave and the lease interact before signing a separation agreement.
Worked example: the same lease can have two very different outcomes
Imagine a lease with $1,100 of monthly packaged costs and a $25,784 residual. With a new employer that accepts the novation, the arrangement may continue subject to the new employer’s rules. Without a new employer, you may need to pay the lease from after-tax income, settle it early, or sell the car and cover any shortfall. The residual remains part of the decision either way.
Common questions about this decision
Do I lose the car when I leave my job?
Not automatically. The lease may transfer to a new employer, revert to you personally, or be settled through sale or early termination. Your contract and the new employer’s packaging policy determine the available path.
Does the EV FBT exemption continue after I leave?
The exemption applies to eligible benefits provided to a current employee under the relevant conditions. If the lease is no longer salary packaged or the employment arrangement changes, do not assume the same treatment continues; confirm it with the employer and provider.
Which primary sources support this guide?
Tax treatment changes. For the underlying rules, check the current Australian Taxation Office material before acting: