Estimate your tax savings and compare a novated lease against buying outright.
After 3 years, your novated lease costs $10,845 total in net out-of-pocket cash.
That's approximately $3,615 per year, or $301 per month after all tax and GST benefits.
Your total tax and GST savings: $15,075 (from salary sacrifice and exempt GST).
Lease is $19,655 cheaper than buying with cash over 3 years.
Car loan is $8,570 cheaper than leasing over 3 years.
| Year | Lease Cost | Tax Saving | GST Saving | Net Cost |
|---|---|---|---|---|
| 0 | $0 | $0 | $0 | $0 |
| 1 | $9,500 | $3,040 | $1,985 | $4,615 |
| 2 | $19,000 | $6,080 | $3,970 | $9,230 |
| 3 | $28,500 | $9,120 | $5,955 | $13,845 |
Used for childcare subsidy, Medicare levy surcharge, and child support means-testing.
A novated lease lets you pay for a car and its running costs from your pre-tax salary, lowering your taxable income. Enter the car's price, your income and the lease term, and the calculator estimates your lease payments, the GST you save on the purchase, and your income-tax saving — then compares the total cost against buying the car outright or with a car loan. If you choose an eligible electric vehicle under the threshold, it applies the FBT exemption, which is what makes EV novated leases so effective. For other cars it uses the Employee Contribution Method to offset FBT. The result is an apples-to-apples, after-tax comparison so you can see which option actually costs you less over the term.
The calculator uses current FY2026-27 ATO settings — income tax and Medicare rates, GST and FBT — and the same tested calculation engine behind the rest of MyNextDollar. Treat the result as a close estimate for comparison, not a formal quote: your actual lease depends on the financier's interest rate and fees, the residual (balloon) value, and your employer's packaging provider.
Yes. You can model an electric vehicle, and the calculator applies the FBT exemption for eligible low- and zero-emission cars priced under the fuel-efficient luxury car tax threshold — which is what makes a novated lease especially powerful for EVs. It also accounts for the GST saving on the purchase price.
Yes. Where the car qualifies as an eligible EV under the threshold, the calculator applies the FBT exemption so no FBT is payable. For non-exempt cars it uses the standard statutory-formula approach with the Employee Contribution Method to offset FBT, so the after-tax comparison is realistic either way.
Any employee whose employer offers salary packaging can use a novated lease — it's a three-way arrangement between you, your employer and a financier, and works for personal or mixed-use cars. Sole traders and people without an employer generally can't (there's no salary to package), though many employers extend it to casual and part-time staff.
I'm a geologist-turned-builder who got frustrated with financial calculators that hand-wave how Australian tax actually works.
Every projection on MyNextDollar runs on current ATO mechanics for FY2026-27 — Stage-3 brackets, super contribution caps and HELP thresholds.
The calculation engine is covered by 88 unit tests and 10,000 fuzz scenarios, so what you see is exactly what the rules produce — not a rough estimate.